The Power Of Zero Show Dave Ramsey: Fire Your Tax Advisor for Recommending a 401(k)!
Feb 5, 2025
In this discussion, financial nuances take center stage as David McKnight challenges one-size-fits-all advice from financial gurus like Dave Ramsey. He dives into the pros and cons of Roth vs. traditional 401(k) plans, emphasizing that personal tax situations matter. The looming tax increases in the next decade raise the stakes for retirement planning. David also shares strategies to extend the longevity of your savings while critiquing conventional wisdom and advocating for a more tailored approach to managing money.
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Ramsey's 401(k) Advice
- Dave Ramsey advised a caller to fire his tax advisor for recommending a traditional 401(k).
- Ramsey believes that tax-free growth outweighs tax deductions, causing David McKnight to criticize his oversimplified advice.
Roth vs. Traditional 401(k)
- Consider individual circumstances when choosing between Roth and traditional 401(k)s.
- Contributing to a Roth 401(k) is suitable if your retirement tax bracket is higher than your current one.
401(k) Rule of Thumb
- Contribute to a Roth 401(k) if you're in the 24% tax bracket or lower.
- Consider a traditional 401(k) if you're in the 32% tax bracket or higher.
