Why You Should Do a Roth (Part 4)

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.

What happens to Required Minimum Distributions to a surviving spouse??? Watch the video and see. It’s not very easy on the eyes to watch, trust me.

Same RMDs, MUCH, MUCH higher tax to the survivor.

Income goes down 10%, but taxes go up by 28% but the fun doesn’t end there.

Medicare Part B premiums go up by $294 a month and, yes I said AND, Part D premiums go up by 200% as well!

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