Welcome to Ditch the Suits Podcast, where we share insights nobody in the financial services industry wants you to know about. We're here to help you get the most of your money in life, so buckle up and welcome to Ditch the Suits. Well welcome back to Ditch the Suits Decamble here with Travis Moss, folks who's ready to get better today? Who's ready to get some kind of nugget of information that can really help you on your road to financial independence? That's what we're all about here. Today we're going to talk about a topic of when to and not to fund a Roth. You know, at Ditch the Suits, we're about giving you a point, sometimes counterpoints, that financial planning is not a one-size-fits-all. And remember, we started our new series last time talking about supercharging your charitable donations. Today we're going to talk about funding a Roth, because it's around this whole idea of how can we help you increase your net earnings by even 1%? Giving you strategies and ideas that can help you put more money in your pocket by utilizing financial planning techniques that might be right under your nose that you're not even aware about. And how do we know this? I have the honor of serving as your Chief Brand Officer at Seed Planning Group, a fee-only financial planning firm, building hundreds of hours of financial planning with Travis at the helm as our CEO, financial planners working with people like you from all over the country that have big life questions about how do we know what we're doing is the right thing. And this is what we have learned in our collective consciousness that we want to bring to you financial planning ideas that many times people aren't even aware about, and one has to do around this idea of funding Roths when and what not to. So Travis, when we talk about net earnings though, what's the framework that we want to give people as to why this is important? Well, financial freedom. In net earnings, earnings is that what's left of your pile of money after you take it out of your accounts. That's the net part of it. So we're talking about after you pay your taxes, after you pay your fees, product charges, all that kind of stuff, right? So it's what you actually have left in your pocket. And most people, when they think about this, they think that there's two ways to do this. They think, well, geez, I could just cut the fees out. So you know, Steve, Travis, I don't need to work with somebody like you. I can figure this out and cut out the middleman. Some people can do that. Yep. Good planners though have thousands of 10,000, like 10,000 hours into experience. You know, our firm has tens of tens of thousands of hours because we have so many planners, but the group works as a team. So this stuff kind of percolates to the top, like how do we better address somebody's issues? How do we make sure that we're consistent with all clients, those types of things? We're in a pursuit, basically, to try to figure out how to help people find that additional 1%. Not necessarily just through slashing fees, you should be cognizant of your fees. It's important not to overpay for things. You should be cognizant of your risk, but contrary to what a lot of people think, it's not just increase your risk, increase your returns. A lot of times there's these other things that we can do to get more money in our pocket. And one of them is kind of centered around this idea of Roth IRAs and this idea that Roths are always the best tool to be using. And I should just get my money in the Roth because I just want to be tax-free forever and how does that work? So hopefully, our last episode, we talked about charitable deductions and how they work, and maybe that makes a half a percent difference to you overall, right? So if you have a million dollars, maybe we just saved you or found you $5,000 per year. Roths, if we can make a difference here with the Roths, maybe they'll save you another half a percent. Now we're back up to that percent thing, right? Some people are going to benefit more from this. I mean, we've looked at prospective people who have come in and said, "Hey, I want to work with you and I think I want to work with you. I don't want you to take over my assets or anything, but I want to know, could I be doing things?" I mean, there was one that we looked at and we're like, "Yeah, you're gifting wrong." And we're looking at, I think it was, it was a lot of money that they could save and we're saying, "Look, let's pretend it was $50,000 because I don't know how to top my hat. Let's pretend it was $50,000. You could save by rearranging how you're doing, in that case, you're gifting, and it's going to cost you $14,000 to go through the workout. Well, you get the net difference, right? So if you don't get the advice, you don't do it, and if you get the advice, you've got to pay somebody, but you get the net difference. So if you could save 50 and you got to pay $14,000, that saves you $36, right? So there isn't that difference to that. So some people, if you will, figure out how to do this on their own. Some people need to point it out to them. But with the raw, a lot of people are going to sit there and say, "You know, I've got to figure it out with the raw. They don't really need any help." Again, this is another place where I've even had these discussions with CPAs. Stop giving clients bad advice. It's not always raw through bust. That's not how it works. Even if you think taxes are only going to be higher in the future, that's the wrong attitude when you're looking at something that is much more complicated than just whether or not I have to pay taxes when I take the money out. Let's take a break to hear a word from our sponsor. This episode is brought to you by the Unleashing Leadership Podcast. Join Travis Moss, seasoned entrepreneur and business leader, on a transformational journey of leadership exploration. In this thought-provoking podcast, Travis shares his invaluable insights and experiences gained from two decades of managing diverse businesses, which include small family enterprises, fortune 500 companies, and his own successful startups. Through candid storytelling and real-life examples, he unveils the profound truth that successor failure ultimately rests upon a leader's ability to recognize and unleash the potential in others. Start listening to the Unleashing Leadership Podcast today available on all major podcast platforms. One, I think, to any listener, they might say, "Okay, Travis, you've perked my interest. Help me understand because I've been told to believe or read in books that Roth is the way to go in the future." I think the value of the planner and what you just talked about, folks, if you missed that first episode of the series, just do yourself a favor. Go back. Take the 25, 30 minutes, listen to it because it could really empower and change your life. But I think when we think about whether to funder Roth, we need to start even just at the core basics to help people understand what we're talking about. When we say Roth IRA, what do we mean and why should we care about this? I think that that's a good point. Let's make sure everybody understands what we're talking about. An IRA is really a tax code. What it means is I put my money into an account with the IRA tax code assigned to it. That means that I qualify under the rules that would allow me to take a tax deduction off my income under certain circumstances. This isn't, back, don't confuse this with charitable, we're talking about standard deductions or not. It's just a pure deduction on your income. Now your income has to be in certain pressure to be able to do that. Really a regular IRA or what's referred to as a traditional IRA is I get the tax deduction to put money in upfront. Same thing with 401(k). If you have a traditional 401(k), you get the tax deduction and put your money in upfront. If you had $100,000 of income and you put 10% in, you're only going to get taxed at on the 90,000. So 100 minus 10% will be 100 minus 10 equals 90. A Roth IRA is another version of it. It's another tax code attached to it. What that does is if Roth is attached to it essentially, you don't get the tax deduction. You just don't get it. And the difference is on the IRA, the traditional IRA, when you take money out in the future because you got a tax deduction, you pay taxes when you take it out. I can't tell you how many clients are actually surprised about this. What do you mean I have to pay taxes on this when I take it out? What do you mean if I want to give it to my kids, I have to pay taxes on it? What do you mean if I don't need this, I have to take money out anyway and still pay taxes on it? You got a tax deduction. The IRS said, here's a freebie. The IRS is like the mob. They're going to get their pound of flesh one way or another. So they give you the freebie up front, they get you at the end, right? Well, the Roth is the opposite. You pay your pound of flesh up front and they don't come back for more. They let you get out. Basically, you've paid your dues, you can get out. So that's the difference between the Roth, whether it's a Roth IRA or a Roth 401K and the traditional, whether it's a traditional IRA or a traditional 401K. Yeah, and if you're probably here on digital suits, not imagining you'd hear the word pound of flesh with financial planning folks, well, because welcome to the way that Travis and I roll. And I can tell you, again, from being the first point of contact for our team and people that call in, how many retirees are cash poor? And what I mean by that is you got individuals that have millions of dollars in traditional IRAs and on paper, it looks like tons of assets. But any time they want to go take money from those accounts or fund a wedding for their kids or a dream vacation, they kind of gulp because they're like, how do we get it out without getting killed tax wise? So there's a lot of individuals, maybe even you listening to this show who you've done all the right things, right? You've saved, you've saved, you've saved, you've saved, you look at your Schwab or your fidelity statements and then there's more zeros that you can imagine. But because of the way you funded it, as Travis just said, everything being pre-taxed tax deductions up front, you now have to pay a pound of flesh and taxes and there's a lot of retirees that are very concerned because they're trying to figure out, I don't want to do it illegally, but how do I get money out without crushing ourselves? So if you find yourself in that camp, we want to, again, go back and listen to the first episode of this series, but help you understand when to and when not to fund a Roth because it's not just always straight vanilla financial planning. So then maybe we've talked about what a Roth is. Let's talk about then the importance of how financial projections can help us understand maybe when to and when not to. Well, you said it. You can be cash poor and still have a lot of money. When you've accumulated a lot of money in those retirement accounts and you go to get it, the traditional side of it, the IRA side of it, the more you want, the bigger that pound of flesh is, right? The reason why it is because that's how the tax brackets work. So imagine, just imagine that you get a 22% tax bracket, put some money away or tax deduction to put some money away and then you pay 32% or 38% when you take it out. That's a, you got a little bit of benefit, then you paid a lot and it happens to people. I've seen it happen to quite a few people. So when we're thinking about whether or not we put money in a traditional IRA or Roth IRA, the first thing that we have to know is a financial projection. And that's not a, like I put it on an Excel sheet and there's how much money I'm going to have in the future, right? Like this is compounding 8% return. There's a lot of things that you have to take into account. You have to have a methodology to project asset growth. How are you actually investing? And what's the likelihood that your investment assumptions will come through? We all think that our investment assumptions are great, but the more experience I've had with this, the more I realize that, you know, you're going to have a range of output and you're really targeting a range. Somebody comes in and says, I'm targeting 6.5% return every year, you know, give me the optimal amount of risk. Well, risk changes from you, you're depending on what's going on. So, you know, you're going to have a range of output. So the first thing is you're projected asset growth based on what you're doing and the tax nature of what you're doing. If you're putting money in an IRA, a traditional and in a Roth, let's say your 401k or something, how do those things project and how it's each one invested? A lot of people look at and say, overall, I, you know, do kind of moderate and I put my money in my Roth and a healthcare fund, I put my money in my IRA in the S&P 500. Well, they're both going to have different growth trajectories. And so how does that look in the long run? A 1% difference compounded over a 30 year time period or we could even be talking about a 50 year time period for some people is extremely different, you know, you do the compounding math calculation for an 8% versus a 9% return over 50 years. You have to project future income. So it's not just income off the investments, it's income or RMD schedules, which most people don't really understand what an RMD schedule is, acquired minimum distribution. That's when you're required to take money out, but what's your social security going to be? Well, you know, I don't believe there's going to be social security. Yeah, but there is. So as much as you don't believe it, all the people who are getting social security right now also didn't believe it and they're still getting it. So you have to account for the fact that there could be social security and part of that's going to be taxable and that's going to impact the taxation of assets when they come out. The tensions, those types of things, inheritances or potential for inheritances. If you have a business, you know, once the business is sold, how is that going to impact or maybe the business never will be sold and you get all this pass through income. You know, could you be in a situation where you're never going to be in a lower tax situation than you are now? You're at that lowest point you're ever going to be. You're paying the least amount of tax you're ever going to pay for rest of your life or you could say that with pretty good certainty. You know, nothing is written in stone, but you could say a pretty good certainty. We talked about in the last episode, charitable gifting and things that you could do once you hit 70 and a half and the best possible way to gift once you get 70 and a half is directly out of your IRA. Yep. Well, what happens if you don't have any money in your IRA? Nothing to do you any good, does it? So that's something to think about, you know. We have people who back to getting cash, let's say that you want to retire young, you're in a retired age 50 or 48 or something like that, or 45 or 55. All these different types of accounts have different rules to it too and you need to keep that into account. Which assets are you going to use when and how is that going to impact your taxes? Is it better for you to use cash early, defer certain things, do Roth conversions, those types of things, you have to figure out the tax plan that's in the projection or at least when the tax plan's going to kick in and so an experienced planner can tell you, you know, without having to figure out the number that there's going to be a profound benefit. Inexperienced people say, I want to know exactly what the number is. You're not going to get an exact number. You shouldn't be getting an exact number. You should really be getting at these age ranges, we're going to do these different strategies and this is how that would make you a significant difference. Now exactly where we're going to zone in, that's going to be seen when we get there. Like exactly when should I take Social Security, look, we're going to have to assess that when you get close to Social Security based on all the other variables that could have changed between now and then you've got two other issues. You have estate taxes and inheritance tax issues, you have gifting issues, like can you actually gift some funds out of your name and you have what's called IRD issues and IRD is income and respect and descendant, that's what potential tax bill that you leave out to the kids and if you have really successful kids, that could be particularly devastating or if you have kids that aren't particularly successful, maybe they all got into fields that don't pay very much. Well, they can be successful, let's say, and not have a lot of money, all right? So let's say that you have successful kids, but they just don't have a lot of money or you have kids that aren't successful and they don't have a lot of money. One of the two scenarios, right? Their tax rate might be significantly lower than yours. So being able to defer money for your entire life and then leave it to them to pay a lower tax rate, that might make a difference. So there's a handful of different things that are going to come out in a financial projection that may or may not apply to you, but that you would want to take into consideration when you're trying to figure out, should I put money in a Roth or should I put money in a traditional account. So I want to pause here from a moment just from my experience of talking with hundreds of people over the last decade plus, I think there's a difference between, hey, I met with somebody who printed out a projection and showed me I have a 99% chance of never losing my money and what a real financial projection is. And I would say that as you were talking, I think there's three camps that I've kind of coined as I've been sitting here. There's the never group. You've never worked with a financial planner. So what Travis just said is like, okay, you've given me some things to think about. You know, the projected assets, future income, I know to look for IRD. Then you have the left group, meaning that they used to work with a warehouse firm, a big broker, and they left them because they had concerns. Every time they met, everything looked like it was great, but in the back of their head that they knew something was still missing, the projections weren't making sense. And then you have the loaner group. Those are the do-it-yourselfers. This is what I see in chatter on social media, people that said, hey, I plugged in my own numbers for projections, everything seems too good to be true. What am I missing? Computers and software can only take you so far. And I think what you just said, and I want to just expand upon it, the value of a good planner who does not have the conflicts of interest of selling you products, but really understands the taxation of all these things. Most people, Travis, in our industry cannot talk about taxes because they're not legally obligated to be able to do that. So if you have a financial plan that does not take into account or consider taxes, then you really don't have a financial plan. Then if you mask on all the other areas, the IRDs and the estate planning, what you just said might be the first time that people have ever heard of that. So I just want to give people a little bit of grace to understand that this should be the expectation that this is what a real financial projection looks like because there is no way within five minutes a professional can tell you whether to fund or Roth or not. So I just thought it was helpful to kind of lay a little bit of groundwork for it. There's really no way within an hour that somebody who's really taking the fiduciary responsibility serious could do that. And that gets us to like what I was thinking while you're saying that, so you go and you look at your model, whatever model you create, and it says 99% chance of success or the model looks obscene, you're going to have all this money someday. Your planning's not done. Yeah. Because number one, the variables that went into that number, first and foremost, you need to make sure that they're accurate. And most of the time there's some personal conjecture there, but number two, they change all the time. But what really should happen once you have that high success rate in your projections, you need to come back now and you need to say, okay, but how can I make that even better? Because that's where people leave literally, I think hundreds of thousands, if not millions of dollars, depending on how much you have, just give it away by not taking advantage of it. Because I'm good enough. I'm 99%. Okay. So if you could be 99% and you could be sitting on when you're 80 years old, $4 million, or you could be 99% and when you're 80 years old, you could be sitting on $12 million, which one's better? And why wouldn't you do it? And if you're like, because money doesn't mean anything to me, find a charity. And give it all the charity, right? Get your name on the building. If you don't like putting your name on the building, donate it anonymously. But why give up the money? Especially when a lot of times it's just these little things that you can be doing and that make these profound differences over time. So we go into a meeting and we're staring at projections all the time. Once you're 99%, you don't really even need the projection. Now what you're looking at is you're saying, how can I goose this? How can I make it even better? Improve. Yeah. And it's not about products. If how can I make this better? I should buy this annuity. How can I make it better? I should sell this mutual fund and buy that mutual fund? We're missing the point here. It's not to sell more products. How do I better assess taxes? How do I better assess a holistic view on my portfolio and some of these other things? The product component is like, okay, now I'm ready to implement. But actually, do I need there for that? All right. So back to kind of what we're supposed to be talking about, the Ross, I wanted to run the numbers because I'm certain that we still have the disbelievers who are saying the Roth always benefits you. And back to the IRS being like the mafia. They are not stupid. They got the numbers. And really, all the IRS does is they enforce the tax code. It's Congress, that's the sum. And you think Congress, which is full of a bunch of rich people, are dumb. They may not get a lot, but almost all of them are attorneys and they're not dumb. They figure this, or somebody's writing the bills for them, that figures this stuff out. And here's proof on the Roth. If you are in the 12% tax bracket right now, but you, in your projections, will be in the 22% tax bracket, oh, wait, wait, I'm getting ahead of myself. We're going to set this up. We're going to set up if when a Roth isn't a good idea and when a Roth isn't a bad idea. I just jumped ahead of the notes. Let me go backwards. Before we get to that, understand exactly how this works. Roth and IRAs are designed with a flat tax bracket in mind, meaning if you're in the exact same tax bracket today as you're going to be in tomorrow, you pay the same amount of taxes as far as the net benefit. Because if you pay $10,000 in taxes today, that's much less money you have to make interest. But if you had that and you made interest and then paid taxes on it in the future, if you, as long as you're in the same tax bracket, the math works out perfectly. This is how that works. We're going to put money in an investment. We're going to take $100,000, we're going to put it in an investment and it's going to grow at 8% a year for the next 30 years and I'm in the 12% tax bracket. Basically, I'd have to pay 12% taxes on it. If I put it in a Roth, so I'm going to take that 100 grand, I'm going to put in a Roth, I'm going to pay my income taxes on it. I'm only going to have, this is pretending you could put a 100 grand in a Roth. I'm only going to have $88,000 in this Roth because I had to pay like 12%. In 30 years and 8%, I'd have about $885,000. That's pretty cool, right? You're $88,000 or essentially you're $100,000 turned into $885,000. Now, if I put in that IRA and I got tax deduction for the whole amount, so I get, I put 100 grand in or I have $100,000 and I can put the whole 100 in, right? No taxes off that. Remember, I got to pay taxes when I take it out. But I would end up with in 30 years, $1,000,000, $265. You know what that is? After you take out the 12%, $885,000, the same exact number. Now, I know if you take out a million dollars, you're not going to, it's going to be more than 12%, but theoretically, if you took it out over years and 12% bracket or whatever. There's, and this is, again, where the projection is going, if you're like, well, that's not how that works, exactly. You need a more sophisticated projection than what you could just do in your mind, but at least this gives you an idea of how the logic works from a standpoint where the math comes from. So then the next question is, when is a Roth a good idea and when is it not a good idea? And can we make it a little bit more concrete? So Steve, did you want to jump in with anything before we jump to that? No, I think, I think laying the groundwork for what we said is going to help with this next part, because again, that's why you're here, is you want to know when should you, different than somebody else versus somebody else, you know, when should you fund it and when not. So I'm going to give you two different scenarios, the first one truck with us, when is a Roth a good idea? You're in the 12% bracket today, and this is an example. So this, this could be extrapolated to somebody's personal situation, what you're going to see is you're going to see an escalation 12% today, and you're going to be in the 22% in the future. So the point there is your tax rates are going to be higher in the future. And you knew that because let's say you're going to have higher income in the future or less deductions in the future. So you know you're at 12, and you know you're going to be in a higher bracket in the future. Well, if you went from 12 to 22, back to the Roth, I put $100,000 in for 30 years at 8% after I paid my 12% income taxes on, I've got $885,000. Had I done the IRA, I would actually be 90 now $785,000. Why? Because that million $6,265 that we talked about minus the 12% was 885, but we're not subtracting 12% now. We're in the 22% bracket when we take it out. And now we're taking 22% out, and therefore I end up with $785,000. So it's going to cost me actually $100,000 more if I get this backwards. And a lot of people get it backwards because you go to your tax prepare and what's your tax prepare or say, "Wow, you got to pay all these taxes. I can save you money, throw $5,000 into your IRA." Or Roths are the best, go throw $5,000 into the Roth. And they kind of get those at the wrong points for you. Let's reduce your taxes today. Yes, but I happen to know you're going to be in a higher tax bracket in the future. The CPA doesn't. And so they're trying to save you money. They're saving money today. What's going to happen? The pound of flesh it's going to come due, and it's going to be a bigger pound of flesh in the future. Yeah, one of the most popular. So as we did a few years ago was that the goal should not be to pay as little as taxes in 2024 and basically sacrifice the rest of a lifetime of income taxes. It's how can we, and again, your professional, your CPA is only looking at today here at now versus a financial planner, it's going to try to look at a lifetime of income taxes. So how do we understand when it's okay to pay more in taxes so that we understand the bigger picture of the net benefit to you and your family? Right. So in that example, that's what we'd be looking at. Your tax bill is like this little wild animal that needs to go do stuff and needs to get out. And when you take a tax deduction or when you reduce your tax bill, a lot of times what's happening is you're caging up the little wild animal and that little wild animal is going to rev himself up, rev himself up and rev himself up until when you let him out, he doesn't just come out like in slow motion. You know, it's not like he was when you put him in there, he comes out and it's a blast of energy and it's destructive and he's going to destroy everything, right? So the goal is is when you're doing tax planning is not to lock up the little animal, but to understand when to let him out and kind of like burst, right? To diffuse it over time, not eliminate it without understanding where it could pop up in the future. And most of the time when people are trying to do tax planning, they're trying to cut the tax bill today without thinking about where's it going to show back up in the future? Because nine times out of 10, unless you're just really screwing up on your taxes, what you're doing is just moving it around, you're just caging it up. And you need to think about, okay, like, you know, there are definitely like we talked about charitable deductions, people screwing up and paying more in taxes than they should. So there are ways to eliminate the taxes, but there are, for most people, what we're doing is we're just moving it around and we're creating this caged animal scenario. So Ross, they're not a good idea. And this is a simple example, but you're in the 22% bracket now. But you when we do the projection, we're like, look, you're probably going to be in the 12% bracket once you retire for the rest of your life or the equivalence, whatever it is at the time. So the easy math is that Roth, you take the 22% hit now. So you only invest what $78,000. You end up with $758,000 in 30 years compared to the IRA where you get that tax deduction now. So you get the whole $100,000. Remember that $100,000 invested is $1,266,265, but then you're in the 12% bracket, which gets you back to $185,000 number, the original number where we started. So in that case, the IRA was a better idea. It's like a hundred some $1,000 difference and that doesn't even count when we get into what we talked about last time with the QCDs and stuff and how you can actually get additional benefit from that. And you also have to take into account the impact of RMDs, required minimum distributions. And these are very hard for people to project out as far as how this is going to work. Because again, you have to get back to how much have you taken along the way, how are you invested, are you doing charitable gifting, those types of things. But RMDs, so if you say, "Okay, well, I'm definitely going to put my money in the IRA then because I'll be in a lower tax bracket in the future," make sure you've got the RMDs calculated in there because that's going to feed your taxable income and the tax bracket that you're in. And even if you're in a lower tax bracket, you could still trigger a modified adjusted gross income threshold, which could increase your Medicare premiums or your Social Security taxes. These calculations are actually quite complicated. And you might say, "Well, geez, what do I really care about making this? So what if it's a $100,000 difference?" We talked about saving $100,000 in this example. Most of the people we work with have saved way more than $100,000, multiples more. So for every $100,000, you make $100,000 difference. We told you we just wanted to help you make a 1% difference. I think we're doing it just by picking the right account, by spending a little bit of time and really around a bunch of sleeves. And we get one more bonus tip for everybody. Do you want to go ahead and hit them? All right. I'll bring it to a close. We just call this asset location and this is the benefit of asset location. When you look at your portfolio and so an ideal situation is you end up with both. You have some Roth and some IRAs by the time you hit the retirement. Now your situation might dictate it otherwise, but let's pretend that you end up with Roth money and IRA money. You can look at those accounts as two separate accounts, right? And say, "Okay. Well, I put a balance portfolio in each account, 99% of investment managers do this." Your moderate investor, the Roth is invested moderately, the IRAs moderately. You got to look at your projections. You got to figure out when you're going to take money out of that Roth. The Roth though, and you got to do this with tax projections because you got to figure out how much am I going to take out of my IRA every year. But that Roth is the most tax-powerful account that you have, right? Because you're never going to be forced to take the money out and pay taxes on it. So instead of looking at separate portfolios, what you do is you say, "Look, overall as a household, I want my money to be, let's say, 55% stocks and 45% bonds. And my Roth makes up 20% of my account. Well, make sure that more of the stocks end up in the Roth. Again, according to what you're going to need distribution rights. So a little bit more complicated than just figuring out a split, you got to figure out your liability schedule and your income schedule. But let's just keep it simple and pretend, "Okay, you don't need to take any money out of that Roth. You're not planning on it, right?" You want as much as the high growth stuff in the Roth as possible because it's all tax-free. None of it's going to come out into your tax bracket. And none of it is going to be forced out when you don't want it. So when you look at your portfolio, you might still have as a household when you add up all your accounts and you break it down, 55% in stocks and 45% in bonds. But that Roth might be more like 80% stocks and 20% bonds or 100% stocks and no bonds or something like that because you're displacing the big growth. What's that do? It displaces future RMDs but it also reduces future RMDs because if that means that my IRA is a little bit more conservative, I'm getting less growth in the account that's going to require me to pay more taxes. So you can really make up quite a profound difference by understanding what to invest in a Roth too. I've seen people with a Roth and they buy a CD in it. Like why? Well, if it's the emergency fund, okay, get it. But when we're beyond the point where it's the emergency fund, why do you take your most powerful tax tool and make it your most conservative investment? And then like in your Robinhood account, you go and you buy a bunch of tech stocks. You're doing it backwards, completely backwards. Get the tax-free stock. Get the big growth stuff as much tax-free as you can. It's why I love this show, a partner we're giving people real ideas that can really help them and inspire them to get the most from their money in life. So again, in this episode, we've covered when to and when not to fund a Roth, looking at financial projections, real financial projections, not taking out taxes and not removing all these things, but real projections that can help you understand. Not just should you do it, but then if you do have a Roth, like you just said here at the end as a special bonus feature, how should we be funding that account? I'm going to be honest. We are all people that will drive across town, not only for a dishwasher, but to save 30 cents on gas. In these two episodes alone, we have showed you how through three simple tips in the first one, supercharging your charitable donations, and then in this one, how Roth could help you, how you could be saving 1% or more in each of those, which can amount to thousands, sometimes hundreds of thousands of dollars over your lifetime. It's worth it to understand it. If you've got questions, get in touch. We're going to continue this series looking at our net earnings. We've got another episode coming up, but as always, visit DitchTheSoots.com, get in contact with Travis and I. We're here to help you get the most for money in life, and as always, thanks for being our guest. [MUSIC] You
