Why You Should Do A Roth (Part 5)

Social Security and Medicare are NOT going broke, my friends.

This doesn’t mean there aren’t issues to contend with but please, for the love of all that is good, do not fall into the trap that you shouldn’t use Social Security in your planning.

Now, with that said, I will not be shocked in the least if you pay more in taxes for your benefits, or even worse, more taxes ON your benefits.

In fact, buried well in the Trustees report that say they say “An increasing fraction of all earnings will be subject to the higher tax rate over time because the thresholds are not indexed. By 2092, an estimated 79 percent of workers would pay the higher rate.”

Hmmmm….a tax that is NOT indexed for inflation. Ever heard that before?

Of course you have! Social Security taxation of benefits.

So, prepare accordingly.


In the last of the 5 part series, we show you what happens when you defer your contributions to your Roth 401k as opposed to the traditional side.

HUGE differences in taxes. Huge difference in Medicare premiums.

HUGE savings in taxes to the surviving spouse…and the kids too!

Yes, Bob and Jane will pay a bit more taxes today. There is no escaping that fact, my friends.

When you add money to a Roth, you are NOT getting a tax benefit today. Thus you will pay more in tax today.

But to calculate if this is worth it or not, you need to look well beyond just your tax bracket today vs. what you think your tax bracket will be in the future.

You need to consider the taxes on Social Security, the extra premiums on Medicare, the increase taxes on long term capital gains and qualified dividends, and you need to consider the same for your surviving spouse who will have a much higher tax bracket than you even if she/he will have less income due to nothing more than being a single taxpayer!

So watch as we run through the numbers for a Roth and compare them to the Traditional.

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