With airlines finalizing new contracts and increased 401(k) contributions, the question of whether to invest in a Roth IRA has become a hot topic among pilots. In this episode, we aim to provide clarity on this complex decision and offer guidance tailored to various scenarios and limitations. From understanding who can contribute to a Roth IRA to delving into the concept of Roths, we explore considerations for first officers.
Listen in as we weigh the benefits of investing in a Roth IRA, particularly during times of financial stability. We’ll address concerns about accumulating too much wealth in a 401(k) and the potential tax implications during retirement, shedding light on the importance of tax-efficient investment strategies.
What You’ll Learn In Today’s Episode:
- The importance of keeping good records.
- What a Roth is.
- What a first officer should consider when it comes to Roths.
- Whether it’s possible to have too much money in a 401(k).
- How Roth can allow you some flexibility in retirement.
- Whether Roth money will ever be taxable.
Ideas Worth Sharing:
- “When you get into retirement, you’re going to want to buy something big and when people don’t have a pile of tax-free money or brokerage money that is tax efficient, they pull money out of their 401(k)s or IRAs and jump a couple tax brackets in that process.” – Charlie Mattingly
- “If you’re in your 50s and you don’t have a Roth IRA at all, then open one, put a few dollars in it because there is a 5-year seasoning rule on that account and you don’t want to wait until you’re 60 or 65 to start to deal with that.” – Charlie Mattingly
- “With a non-elective contribution being all tax-deferred right now, if you want to put money into the 401(k) and you can afford it, now would be a good time to put it all in Roth.” – Kevin Gormley
Resources In Today’s Episode:
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