Why You Should Do a Roth (Part 1)

In part 1 of our five part series on “Why You SHOULD Do a Roth” we introduce Bob and Jane Youtube.

They are both 50 years old. They each make $50 a year. Defer $10k of their salaries to their 401k, their company matches 8% of their salaries.

They expect to get a 7% Rate of Return from now until they reach the age of 60 when they will stop working. They also expect to get a 7% rate of return from 60 -70 when they have to start taking required minimum distributions and then will cut back their “risk” and expect to get 5% returns from there on out.

By deferring into the traditional 401k they save around $2500 a year in taxes which they can invest in a side account, also growing at 7% a year.

Is that the best solution though?

We’ll go over this in depth in this series. So stay tuned!

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