In this episode of Pocket-Sized Advice, Jeb Bowie from TradeWinds breaks down the key differences between pre-tax and Roth retirement contributions—and why understanding the distinction could make a big impact on your financial future.
Pre-tax assets: Contributions go in with a tax deduction, grow tax-deferred, and are taxed when withdrawn. Roth assets: Contributions are made with after-tax dollars, grow tax-free, and are withdrawn tax-free. Most people think about asset allocation—stocks vs. bonds—but rarely consider asset location: how much to put in pre-tax vs. Roth accounts. Jeb walks through the essential considerations including:
Your current vs. future tax rates Estate planning implications Contribution, distribution & conversion strategies Potential for lifetime tax savings
