DIY Money | Personal Finance, Budgeting, Debt, Savings, Investing Traditional or Roth
Nov 24, 2025
Logan and Allie dive into the age-old debate of Traditional vs. Roth accounts. They break down the benefits of paying taxes now for tax-free growth versus deferring taxes to later. Listeners learn when to choose each option based on income levels and future expectations. A grocery store bread analogy brings clarity to this complex decision-making. Plus, they discuss the importance of planning for retirement withdrawals and suggest a blended approach for optimal savings. Tune in for strategies that could shape your financial future!
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Listener Question From Ron In St. Pete
- Ron from St. Pete asks if he should use traditional 401k now because he expects higher net worth but lower salary later.
- His question frames the episode's discussion on choosing Roth versus traditional accounts.
Match Account Type To Your Tax Bracket
- Pay tax now with a Roth if your current taxable income is low and you expect higher tax rates later.
- Use a traditional account to defer tax if you're in a high-income year and expect lower taxable income in retirement.
Taxable Income, Not Net Worth, Drives The Decision
- Net worth alone doesn't determine Roth vs traditional; taxable income does.
- Taxable income can include dividends, interest, and capital gains from taxable accounts, so investments affect the choice.