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Welcome to Financially Fluent with Ray Godleski from Southeast Wealth Partners, LLC. Whether you're already retired or planning for the future, navigating financial advice can be overwhelming. This podcast cuts through the noise, bringing real insights from experts who specialize in every aspect of a successful financial plan—including how to adapt when things don’t go as expected. Join us as Ray Godleski answers audience questions and shares actionable strategies—not just empty clichés.
00:00:01 [Speaker 1]
Welcome to Financially Fluent with Ray Godleski of Southeast Wealth Partners.
00:00:06 [Speaker 1]
Our goal is to equip you with the knowledge and tools necessary to navigate your financial journey with greater ease and efficiency.
00:00:13 [Speaker 2]
Hey.
00:00:14 [Speaker 2]
Good afternoon, everyone.
00:00:15 [Speaker 2]
Welcome to the next episode of Financially Fluent.
00:00:18 [Speaker 2]
Today, we'll be talking about Roth IRAs, which I love them because they're really good for all ages.
00:00:23 [Speaker 2]
Whether you're a two year old or a 100 year old, everywhere in between, you might wanna think about a Roth IRA.
00:00:30 [Speaker 2]
And for today's show, we got Cindi Walters from our team.
00:00:33 [Speaker 2]
Welcome back, Cindy.
00:00:35 [Speaker 2]
And we have a new person on, which is our summer intern from the wonderful Georgia State University of downtown Atlanta, finance major, Gavin.
00:00:45 [Speaker 2]
Say hi to everyone, Gavin.
00:00:47 [Speaker 2]
Yeah.
00:00:47 [Speaker 3]
Hello, everyone.
00:00:48 [Speaker 3]
Thank you, Ray and Cindy, for having me on today.
00:00:51 [Speaker 3]
And, yeah, we'd love to talk about Roth IRAs today.
00:00:53 [Speaker 2]
Excellent.
00:00:54 [Speaker 2]
Yeah.
00:00:54 [Speaker 2]
I know you're about to be a senior, and so, I think you got good days ahead of you.
00:00:58 [Speaker 2]
It's been wonderful having you here on board.
00:01:00 [Speaker 2]
And, of course, it's saying I've been together for a while, so it's awesome to always have her on the show when we can.
00:01:06 [Speaker 2]
Thank you.
00:01:06 [Speaker 2]
But, yeah, let's just get right to it.
00:01:08 [Speaker 2]
I know you both have questions today.
00:01:10 [Speaker 2]
Cindy, fire away.
00:01:11 [Speaker 2]
What do we got?
00:01:12 [Speaker 4]
Can you start by explaining exactly what a Roth IRA is and how it's different from a traditional IRA?
00:01:19 [Speaker 2]
Yes.
00:01:19 [Speaker 2]
So Roth IRA, IRA stands for individual retirement account.
00:01:23 [Speaker 2]
So that's true whether it's a traditional, which is, what they call pretax, where you're getting a a deduction on the way in, but you gotta pay tax later.
00:01:31 [Speaker 2]
The Roth IRA, you're gonna get both of them you get tax free growth, but the biggest difference is on the Roth, you're gonna take that money out later tax free.
00:01:39 [Speaker 2]
So, there's a few rules around making a qualified withdrawal.
00:01:44 [Speaker 2]
Roth IRA, you know, has more investment options than a four zero one k, so that's always important.
00:01:51 [Speaker 2]
We might be able to remember that.
00:01:53 [Speaker 2]
You you could put money in a Roth, and you got lots more investment options than you would in a four zero one k.
00:01:58 [Speaker 2]
But then, you know, in a nutshell, that's what it is.
00:02:00 [Speaker 4]
Okay.
00:02:01 [Speaker 4]
And why do you think the Roth IRA has gotten so popular in recent years?
00:02:06 [Speaker 2]
Yeah.
00:02:06 [Speaker 2]
It really has.
00:02:07 [Speaker 2]
It's gotten, very popular.
00:02:08 [Speaker 2]
I think some of it's just education, to be honest with you, and just awareness, that it's out there.
00:02:13 [Speaker 2]
There's a lot of people, way before me talking about it, whether it's through blogs or or podcasts.
00:02:20 [Speaker 2]
People believe that taxes are going up in the future.
00:02:23 [Speaker 2]
Was that true?
00:02:24 [Speaker 2]
Nobody knows.
00:02:25 [Speaker 2]
But when the national debt is at $36,000,000,000,000 that's roughly about 120% of GDP, it's just math.
00:02:31 [Speaker 2]
There's a really good chance that the tax rates are gonna go up into the future.
00:02:36 [Speaker 2]
And so that's just not a good trend.
00:02:38 [Speaker 2]
And so with a Roth IRA, you just have greater control of when you take off distributions later on how you're gonna be taxed.
00:02:46 [Speaker 2]
Yeah.
00:02:47 [Speaker 3]
Alright, Ray.
00:02:47 [Speaker 3]
I have a couple questions for you.
00:02:49 [Speaker 3]
Since this question is coming from you just because, like, I'm a college student myself, I wanted to ask, who would benefit most from having a Roth IRA?
00:02:57 [Speaker 3]
Is it mainly for young investors?
00:02:58 [Speaker 2]
Yeah.
00:02:59 [Speaker 2]
So I love this question because, we're here we are recording this on July 3.
00:03:03 [Speaker 2]
Right?
00:03:04 [Speaker 2]
Tomorrow, we're gonna celebrate, you know, our independence and our freedom.
00:03:08 [Speaker 2]
And to me, a Roth IRA gives you freedom because when you take that money out later, you're not worried about the tax man.
00:03:15 [Speaker 2]
Right?
00:03:15 [Speaker 2]
Because you're taking out the money tax free.
00:03:17 [Speaker 2]
So for young investors, it is very attractive for a couple reasons.
00:03:21 [Speaker 2]
It doesn't mean that everyone that's young should do them, but it does mean that you've got time on your side.
00:03:28 [Speaker 2]
So if you're putting in money into a Roth today and all of a sudden it's thirty years later, you're taking that money out.
00:03:36 [Speaker 2]
But I've seen people in their sixties.
00:03:37 [Speaker 2]
They'll make, you know, Roth conversions.
00:03:39 [Speaker 2]
So it's it's not just for the younger crowd, but certainly when it comes to having more time on your side for that to compound, the, you know, the the younger age age group might benefit from it.
00:03:49 [Speaker 3]
Alright.
00:03:49 [Speaker 3]
Yeah.
00:03:50 [Speaker 3]
Of course.
00:03:50 [Speaker 3]
Alright then.
00:03:51 [Speaker 3]
And then are there any, like, income limits that could disqualify someone from contributing directly to a Roth IRA?
00:03:57 [Speaker 2]
Yes.
00:03:57 [Speaker 2]
There are.
00:03:58 [Speaker 2]
And so that's where, really, each year it changes.
00:04:03 [Speaker 2]
So we have a kind of a a two page PDF that we like to, send to people, at no charge that talked about income limits.
00:04:12 [Speaker 2]
So for, 2025, if you're a single person or head of household, as long as your, modified adjusted gross income is under $150,000 you can put money into a Roth IRA no problem.
00:04:28 [Speaker 2]
There is a phased out amount between $150,000 $165,000 of income.
00:04:35 [Speaker 2]
So in in there, you wouldn't be able to pull a full amount.
00:04:37 [Speaker 2]
And for our married filing joint, clients that are out there or people that are out there, the income limits for that is pretty I think it's pretty decent.
00:04:46 [Speaker 2]
If you're making up to $236,000 or less, you can do a full contribution into a Roth IRA.
00:04:52 [Speaker 2]
The phase out for that is gonna be between $2.36 and $246,000, Maggie.
00:04:59 [Speaker 2]
And then, now do remember, you gotta show income to put money in it.
00:05:05 [Speaker 2]
So you can't just make a contribution if you didn't make any money except for, let's say you're doing a married file joint return.
00:05:12 [Speaker 2]
There are spousal Roths someone could do.
00:05:14 [Speaker 2]
So maybe one of the spouses is is has a year off.
00:05:17 [Speaker 2]
They don't have any income, but they're below that fresh that income threshold.
00:05:20 [Speaker 2]
They could both put money into the Roth IRA.
00:05:24 [Speaker 2]
As a matter of fact, your children are eligible to put money into a Roth IRA.
00:05:29 [Speaker 2]
Again, you gotta make money.
00:05:31 [Speaker 2]
Right?
00:05:31 [Speaker 2]
So you you couldn't make $5,000 to put $7,000 in it.
00:05:36 [Speaker 2]
You'd have to, make more make more money than you're putting in.
00:05:40 [Speaker 2]
And, of course, they would the minor wouldn't control the account.
00:05:43 [Speaker 2]
It would be a custodial account, but it'd still be in their in their name for their benefit.
00:05:47 [Speaker 2]
And the other category would be if you're married and you're doing a separate return.
00:05:53 [Speaker 2]
Those cases, probably only one of you would have any chance to put money into a Roth IRA because you could only make $10,000 just to gross income to be able to put money into one of those.
00:06:04 [Speaker 2]
If you're doing separate returns and one of them is making more than $10, you can't do it.
00:06:07 [Speaker 2]
And the last thing I wanna say about this would be, you know, what if somebody's making $250,000 of gross income?
00:06:14 [Speaker 2]
Right?
00:06:14 [Speaker 2]
That's the family, that's the the family income growth.
00:06:19 [Speaker 2]
By the time you're putting that money in a four zero one ks pretax and you're putting the HSA contributions, you could very easily reduce your, adjusted gross income down to a threshold that now allows you to put money into a, Roth IRA.
00:06:33 [Speaker 2]
So, yeah, good question.
00:06:35 [Speaker 3]
Okay.
00:06:35 [Speaker 3]
That's interesting.
00:06:36 [Speaker 3]
And then I think you mentioned this a little bit, but what are some of the contribution limits for year 2025?
00:06:43 [Speaker 3]
And are there any catch up rules for people 50?
00:06:46 [Speaker 2]
Yeah.
00:06:46 [Speaker 2]
That's right.
00:06:47 [Speaker 2]
If you are anybody that's making that that money, like I said, you could put in up to $7,000 in contributions per year.
00:06:56 [Speaker 2]
And then if you are 50 and better or 50 and older, as some people say, you could do a $1,000 contribution.
00:07:03 [Speaker 2]
And then just remember the other thing is let's just say you're, it's March, the year you're filing your taxes, and you haven't filed your tax return.
00:07:15 [Speaker 2]
Before filing that tax return, you could put money in today to count towards last, year's tax year.
00:07:22 [Speaker 2]
So we've had people that that come to us before, and we're literally putting in $7,000 one day for one tax year and $7,000 in another tax year.
00:07:31 [Speaker 2]
So you could in theory put in $14,000 in one year, but you just got to count one towards one tax year and one towards the other tax year.
00:07:38 [Speaker 2]
Good question.
00:07:39 [Speaker 3]
Okay.
00:07:39 [Speaker 3]
Got you.
00:07:40 [Speaker 3]
And then could you talk about some of the withdrawal rules, specifically, like, when can someone take the money out without incurring a penalty?
00:07:47 [Speaker 2]
Okay.
00:07:47 [Speaker 2]
So, that's what's what I like about the Roth.
00:07:51 [Speaker 2]
You mentioned younger per people earlier.
00:07:53 [Speaker 2]
You know, when you put money in a pretax account, you're getting, you know, like a traditional IRA.
00:07:57 [Speaker 2]
You're getting a tax benefit on the way in, and you're probably gonna have a hard time avoiding there's a few exceptions, but you're gonna have a hard time avoiding that 10% pre withdrawal penalty.
00:08:08 [Speaker 2]
So even if you're below you know, younger than 59, you can take the cost basis out.
00:08:13 [Speaker 2]
So let's just say somebody put in $14,000 two years later and maybe the account value is $18,000 they could take up to everything they put in without a penalty and without it being taxed because they've taken money that they didn't get a tax benefit on the way in.
00:08:29 [Speaker 2]
Right?
00:08:29 [Speaker 2]
They've used that for tax dollars to put the money in, and now they're gonna take that that money out.
00:08:33 [Speaker 2]
So, again, for someone that's younger, that that's a little bit of comfort versus putting money in that, you know, you can't touch for thirty years without some kind of a penalty.
00:08:43 [Speaker 2]
So that's nice.
00:08:44 [Speaker 2]
But aside from that, the growth, you would not be able to take out.
00:08:47 [Speaker 2]
So that's where, you know, if you're 59, you've had a a Roth IRA for open for five years, then you could take it out tax free.
00:08:55 [Speaker 2]
So good question.
00:08:57 [Speaker 2]
Alright.
00:08:57 [Speaker 4]
I'm gonna jump in with a few questions for you, Ray.
00:09:00 [Speaker 4]
Why is a Roth IRA so powerful when it comes to retirement tax planning?
00:09:05 [Speaker 2]
It's just it's gonna help you control your distribution.
00:09:09 [Speaker 2]
You know, it's so hard when we're working and we're putting money away.
00:09:13 [Speaker 2]
We're looking for tax deduction, And then all of a sudden, one day, you know, we're not doing that anymore.
00:09:19 [Speaker 2]
Right?
00:09:20 [Speaker 2]
So we're taking money back out of these accounts, four zero one ks, traditional IRAs, Roth IRAs, you know, joint taxable accounts.
00:09:27 [Speaker 2]
Right?
00:09:27 [Speaker 2]
We're taking money out.
00:09:28 [Speaker 2]
So if you have a Roth in your, plan, you just got better control on how you're taking money out, to avoid certain consequences that such as Medicare surcharges or if you're trying to maximize your Social Security and have a strategy, a plan in place, it can affect that.
00:09:49 [Speaker 2]
The other thing I'll say is, you know, let's just say you put in $7,000 into, a traditional, IRA.
00:09:58 [Speaker 2]
Right?
00:09:58 [Speaker 2]
And and maybe your effective tax rate's only 20%.
00:10:01 [Speaker 2]
Right?
00:10:02 [Speaker 2]
So you're gonna get about a 14, you know, $1,400 tax deduction, but then that account grows and it's a $100,000 later and now you gotta take out and maybe you're at a 30 something percent tax bracket and you're gonna take out you know, you're basically gonna get taxed at $30,000, you know, out of a $100,000 account.
00:10:19 [Speaker 2]
So had you chosen the raw, you know, and maybe, you delayed that instant gratification of a $1,400 tax break.
00:10:27 [Speaker 2]
Now later, instead of that $100,000 account being susceptible to tax, you're taking out a $100,000, no tax on it.
00:10:35 [Speaker 2]
So I like that.
00:10:36 [Speaker 2]
Yeah.
00:10:37 [Speaker 2]
Those would be some of the things.
00:10:38 [Speaker 5]
If you're looking for advice specific to your situation, then take a look at this episode sponsor, Southeast Wealth Partners.
00:10:44 [Speaker 5]
To learn more about their team and approach, go to southeastwealthpartners.com.
00:10:48 [Speaker 5]
Southeast Wealth Partners is a great next step to be financially fluent.
00:10:51 [Speaker 4]
You've mentioned tax diversification.
00:10:54 [Speaker 4]
How does a Roth help with that?
00:10:56 [Speaker 2]
Yeah.
00:10:56 [Speaker 2]
So, again, you kinda just maximize your maximize your taxable accounts with long term gains, and interest and dividends you get from those.
00:11:02 [Speaker 2]
It's a way to mitigate future tax rates that might change.
00:11:07 [Speaker 2]
Tax brackets could change.
00:11:08 [Speaker 2]
If you have an account where you have a tax free account, you've got a tax bill later account, like a pretax four zero one k IRA, and you also got a taxable account.
00:11:19 [Speaker 2]
You just got more moves to be able to make, and it all kinda works together when you're thinking about the impact that you may have.
00:11:27 [Speaker 2]
Again, kinda get leading back to the previous question about Medicare surcharges optimizing Social Security.
00:11:33 [Speaker 4]
What is a Roth conversion, and when does it make sense for someone to consider that?
00:11:39 [Speaker 2]
Right.
00:11:39 [Speaker 2]
So Roth conversion is where you you have a pre tax account.
00:11:43 [Speaker 2]
Right?
00:11:43 [Speaker 2]
Often that's in a four zero one k or a traditional IRA, and you choose to take the money out of that and convert it to a Roth.
00:11:51 [Speaker 2]
And when you do that, let's just say you did $10,000 conversion.
00:11:55 [Speaker 2]
That $10,000 will be added to your income for that year, and so you will pay a tax on that based upon your tax rate.
00:12:02 [Speaker 2]
So from a timing perspective, if you think that your tax rate in that particular year is gonna be less than in the future, that might be a time to do it.
00:12:11 [Speaker 2]
So maybe someone's got, you know, a loss of income or they had a bad year and they're they're business owners.
00:12:18 [Speaker 2]
There's any number of reasons from a timing perspective you might want to do it.
00:12:21 [Speaker 2]
From a strategy perspective, we'll often do what's called a fill up the bracket strategy.
00:12:26 [Speaker 2]
And and usually, we're gonna do this before RMD age is, you know, required minimum distributions.
00:12:33 [Speaker 2]
Usually, we would do it then and we we kinda do this fill up the bracket strategy.
00:12:37 [Speaker 2]
So whether that's fill it up to a 22% bracket, 24%, whatever it is, or, say, a $250,000 adjusted gross income, you know, there's certain targets you wanna do, and you can do that.
00:12:49 [Speaker 2]
And by being kind of real tactical at it, you might just you just gotta find yourself having more dollars in a tax free bucket later.
00:12:56 [Speaker 2]
The only thing or one of the things I would mention, you gotta be careful because, you know, there are Medicare surcharges, and they're looking at a two year look back.
00:13:06 [Speaker 2]
So if you're doing a Roth conversion and you're doing a kinda the wrong time, the wrong year, you may mess yourself up later when you have to pay Medicare, and now you're paying more for your Medicare premiums than others.
00:13:18 [Speaker 2]
So what you wanna look for is, well, can I do can I do this in a year that I have less income or I'm retired or, unfortunately, you know, became single again, whether it's through divorce or death?
00:13:32 [Speaker 2]
Those are kind of the optimal times you might think about doing a, Roth conversion so that it doesn't kinda mess you up in the future with respect to Medicare surcharges.
00:13:43 [Speaker 4]
Okay.
00:13:43 [Speaker 2]
Then, you know, there's people that do they convert Roth later.
00:13:47 [Speaker 2]
Right?
00:13:47 [Speaker 2]
Maybe they're they're way into their retirement.
00:13:50 [Speaker 2]
They've heard of the Secure Act.
00:13:53 [Speaker 2]
They they now see that their grown children are doing quite well.
00:13:57 [Speaker 2]
Right?
00:13:58 [Speaker 2]
They they that their grown children are making really good income, and now they're a little concerned that from a heritage standpoint that if they're getting some big, pretax account and their grown children having ten years or less to take money out of the account, it's gonna impact their taxes across the board.
00:14:17 [Speaker 2]
So there's some estate planning and you're gonna take, that older person might convert it into a Roth.
00:14:25 [Speaker 2]
They're gonna pay the tax on it, but at least, you know, from an inherited standpoint, they're not have to worry about, you know, that impacting their kids.
00:14:34 [Speaker 2]
One other little caveat that's important to understand, required minimum distributions, you do not have that.
00:14:41 [Speaker 2]
You know, if you own a Roth IRA, you don't have RMDs.
00:14:43 [Speaker 2]
You don't have to worry about it if you're the owner, okay?
00:14:46 [Speaker 2]
But if you're in a pretax account, there you do have RMDs, and you're gonna have to take money out of those accounts.
00:14:52 [Speaker 2]
And when you take money out of an RMD, what you can't do is take money directly from a pretax account that's an RMD and goes directly into a Roth.
00:15:01 [Speaker 2]
You're not gonna be able to do it.
00:15:02 [Speaker 2]
So what you gotta do in that situation is the RMDs are satisfied first.
00:15:07 [Speaker 2]
So those amount of dollars come out first.
00:15:09 [Speaker 2]
And then after you've satisfied your RMDs, if you wanna still convert money into a Roth, you could do it.
00:15:16 [Speaker 2]
Just all that is gonna be income, so I don't think that's gonna happen a whole lot.
00:15:22 [Speaker 2]
It does happen in search situations.
00:15:23 [Speaker 2]
So it kinda gets back to the importance of planning and why someone might want to do those conversions prior to maybe prior to turn off Social Security, but certainly prior to to the r and d h happening.
00:15:36 [Speaker 4]
Okay.
00:15:36 [Speaker 3]
Okay, Ray.
00:15:37 [Speaker 3]
I have a couple questions for you about some common myths or mistakes.
00:15:40 [Speaker 3]
So what's one of the biggest misconceptions that you hear about Roth mistakes.
00:15:42 [Speaker 3]
So what's one of the biggest misconceptions that you hear about Roth IRAs?
00:15:46 [Speaker 2]
There are so many, but let me just, before we get into that, I wanna kinda just touch on from estate planning earlier.
00:15:54 [Speaker 2]
When you're doing estate planning, you gotta think about you know, some people just just think to themselves, hey, I wanna put 10% to a charity or church.
00:16:01 [Speaker 2]
That's great.
00:16:02 [Speaker 2]
It's noble.
00:16:03 [Speaker 2]
I love it.
00:16:03 [Speaker 2]
However, you could think about the Roth IRA probably should go to your your natural person, right, because that's tax free.
00:16:15 [Speaker 2]
And then your pretax account where you got a tax benefit and somebody's paying a tax later, those you can actually have those go towards the charity because because the charities won't be taxed.
00:16:26 [Speaker 2]
So I I did mention that earlier.
00:16:28 [Speaker 2]
I wanted to kinda, while I was on my mind, think about that.
00:16:31 [Speaker 2]
Same thing with trust.
00:16:32 [Speaker 2]
Maybe you have a trust as a beneficiary.
00:16:34 [Speaker 2]
You know, if you're doing that, make sure it's a see through trust, especially if it's a pretax account.
00:16:41 [Speaker 2]
Even if it's a a Roth IRA, if you have it as a as a trust as a beneficiary, and if it's not a see through trust, you know, you would get a tax free you still get tax free benefit, but you have five years to take it out instead of, say, ten years.
00:16:56 [Speaker 2]
So I wanna touch on that, but from a Michigan steps exception standpoint, you know, I've heard people say, you know, I can't do a Roth IRA.
00:17:01 [Speaker 2]
I make too much money.
00:17:03 [Speaker 2]
And so you could do a backdoor Roth, which is people put money in a nondeductible traditional IRA, so there's no tax deduction on that traditional IRA, and then they convert it to a Roth IRA.
00:17:17 [Speaker 2]
Some people call that a backdoor Roth.
00:17:19 [Speaker 2]
I'm gonna say be careful on that because they have pro rata rules, and it can get a little tricky if you have multiple IRAs, multiple accounts.
00:17:27 [Speaker 2]
You could have some, unintended consequences.
00:17:30 [Speaker 2]
So be very careful.
00:17:31 [Speaker 2]
I think the the simplest thing to do that is your employer may have a Roth four zero one k option.
00:17:39 [Speaker 2]
Some people are are unaware of that.
00:17:40 [Speaker 2]
So that to me is is a simple way to do it because there's no income limits inside that four zero one k.
00:17:45 [Speaker 2]
So, you know, you can make $304,100,000 bucks.
00:17:48 [Speaker 2]
And if your employer offers a Roth four zero one k and you wanna do, you know, 5% towards that, 10%, whatever, you can do it.
00:17:55 [Speaker 2]
So that's one.
00:17:56 [Speaker 2]
The second one would be, oh, I can't touch my Roth IRA until I'm 59.
00:18:00 [Speaker 2]
And we kinda touched on this earlier and not not really true.
00:18:04 [Speaker 2]
Right?
00:18:04 [Speaker 2]
Those after tax dollars.
00:18:06 [Speaker 2]
Right?
00:18:07 [Speaker 2]
The money you put in you'd already paid tax on the money and you decide to put money into a Roth IRA.
00:18:11 [Speaker 2]
There is no and you wanna get what the the amount of money you put in, you take that money back out.
00:18:16 [Speaker 2]
There's no tax or penalty on the amount.
00:18:17 [Speaker 2]
It's only the earnings.
00:18:18 [Speaker 2]
You gotta worry about the five year rule and being 59 and a half.
00:18:22 [Speaker 2]
Another misconception would be Roth conversions.
00:18:25 [Speaker 2]
So here, let's say you're, you know, let's say you're 58 years old, right, and you did a $100,000 conversion and you never had a Roth before.
00:18:35 [Speaker 2]
And that was two years later.
00:18:36 [Speaker 2]
You're 60 years old, and you and that $100,000 account, let's just say you've you've done pretty good.
00:18:41 [Speaker 2]
Now it's worth a $120,000, and, you really don't wanna take money out of your other accounts that year.
00:18:49 [Speaker 2]
You could take out $50,000 out of that account.
00:18:52 [Speaker 2]
No problem.
00:18:53 [Speaker 2]
Right?
00:18:54 [Speaker 2]
You could take you could take you could take that money out and doesn't you have to worry about the five year rule.
00:19:00 [Speaker 2]
You don't have to worry about the 10% penalty because you're already past the age of 59.
00:19:05 [Speaker 2]
On that note, I'll say this too.
00:19:07 [Speaker 2]
There is no resetting of the clock.
00:19:08 [Speaker 2]
So some people think, oh, I opened up a Roth account and then I closed it, so now I gotta restart the five year rule.
00:19:14 [Speaker 2]
That is not the case.
00:19:15 [Speaker 2]
That clock starts as soon as you open up a Roth IRA because you're gonna put on your tax form that you made a contribution to a Roth IRA in tax year 02/2005, 02/2025, whatever.
00:19:27 [Speaker 2]
That's really important to understand.
00:19:29 [Speaker 2]
I've seen people they may be in a Roth account.
00:19:32 [Speaker 2]
Maybe they don't like how the investment side going, and they're they're afraid of of doing anything with it and restarting the clock and just wanna kinda mention that's not true.
00:19:41 [Speaker 2]
You can absolutely you could close that transfer somewhere else, anything like that, and that kinda gets back to, I would say, opening up one sooner than later.
00:19:51 [Speaker 2]
So there's no, requirement of distributions as a as an owner of a Roth.
00:19:56 [Speaker 2]
So keep that in mind.
00:19:58 [Speaker 2]
And, again, for beneficiaries on the other end, they will have RMDs.
00:20:02 [Speaker 2]
So if you're grown kids, get a Roth IRA.
00:20:04 [Speaker 2]
You know it's tax free.
00:20:06 [Speaker 2]
They got ten years left to take the money out.
00:20:09 [Speaker 2]
I'm gonna keep going here with misconceptions because there's so many.
00:20:12 [Speaker 2]
I think think the last one we'll probably talk about today would be you should never have an annuity be inside of a Roth IRA.
00:20:18 [Speaker 2]
I wouldn't say that's true either.
00:20:20 [Speaker 2]
It's gonna it depends.
00:20:22 [Speaker 2]
Right?
00:20:22 [Speaker 2]
So if you're trying to accumulate value and maybe, you know, whether it's any number of strategies, could be a fee or anything like that.
00:20:31 [Speaker 2]
It's inside of the Roth.
00:20:32 [Speaker 2]
So you haven't changed it at all because whether you invested in ETFs, mutual funds, stocks or annuity, but still inside of that Roth IRA shell.
00:20:41 [Speaker 2]
So that wouldn't be true.
00:20:42 [Speaker 2]
Even if you did an income play, hey, I just want income for life out of this, SPEA or something like that, you know, as long as it's in a type of a Roth and it's a qualified you wanna make sure it is a qualified distribution that you're at the right age.
00:20:54 [Speaker 2]
Right?
00:20:55 [Speaker 2]
You could do that, and it would not be, taxable.
00:20:58 [Speaker 3]
Yeah.
00:20:58 [Speaker 3]
Right.
00:20:58 [Speaker 3]
That sounds really great.
00:20:59 [Speaker 3]
And I have another question for you.
00:21:01 [Speaker 3]
Is it ever too late to open or contribute to a Roth IRA?
00:21:05 [Speaker 2]
No.
00:21:05 [Speaker 2]
It's it's really not.
00:21:07 [Speaker 2]
Right?
00:21:07 [Speaker 2]
It's never too late, but it's, it's really specific to someone's situation.
00:21:12 [Speaker 2]
But I would say, we got people that are you could be, you know, got a lawnmower business, right?
00:21:17 [Speaker 2]
You wanna put some of those money in a rough, you can.
00:21:20 [Speaker 2]
Let's say you're a parent and you're utilizing you're a business owner and you're utilizing small children, I guess, from a marketing perspective.
00:21:29 [Speaker 2]
They're getting paid you know, they're earning the income.
00:21:31 [Speaker 2]
You could have them get get a Roth.
00:21:34 [Speaker 2]
And like I said earlier, I mean, someone that's super older in age, right, they could still do a Roth conversion into their nineties.
00:21:40 [Speaker 2]
So, yeah, that's there's no time that's you can do it whether you're young or old.
00:21:45 [Speaker 3]
Alright.
00:21:45 [Speaker 3]
Got it.
00:21:45 [Speaker 3]
Thank you, Ray.
00:21:46 [Speaker 4]
Okay, Ray.
00:21:47 [Speaker 4]
If someone listening today thinks a Roth IRA might be right for them, what would be their next step?
00:21:53 [Speaker 2]
Yeah.
00:21:53 [Speaker 2]
So if you think a Roth IRA's next step, you would want to reach out to, an advisor.
00:21:59 [Speaker 2]
Or if you're doing things on your own, check with your custodian and try to open up a Roth account.
00:22:04 [Speaker 2]
You know, you're always welcome to visit our website.
00:22:08 [Speaker 2]
There's a lot of tools on there, southeastwealthpartners.com.
00:22:12 [Speaker 2]
If you have questions about it and you wanted us to answer the questions online or offline, just send it to ray@sewealthpartners.com.
00:22:22 [Speaker 4]
One more question for you, Ray.
00:22:24 [Speaker 4]
Should should you still consider a Roth if you already have a four zero one k through work?
00:22:30 [Speaker 2]
Yes.
00:22:30 [Speaker 2]
You should.
00:22:31 [Speaker 2]
If you have a Roth I yes.
00:22:33 [Speaker 2]
So, you know, in a four zero one k, the employer is dictating what investment choices you have.
00:22:38 [Speaker 2]
Right?
00:22:39 [Speaker 2]
And you may not be able to get money out of there as easily as you'd like.
00:22:42 [Speaker 2]
So you could have a Roth IRA that is your account, whether you wanna, decide which investment choices you want or you have an advisor that could help you.
00:22:51 [Speaker 2]
So you got way more investment options in a Roth IRA than you would a four one k.
00:22:56 [Speaker 2]
Good question, Cindy.
00:22:58 [Speaker 4]
K.
00:22:58 [Speaker 4]
That's all I have for you today.
00:23:00 [Speaker 2]
Yep.
00:23:00 [Speaker 2]
Excellent.
00:23:01 [Speaker 3]
Same with me.
00:23:02 [Speaker 2]
Well, we are we're not done because we have trivia.
00:23:04 [Speaker 2]
That's how our this is gonna work.
00:23:06 [Speaker 2]
Here's our trivia question.
00:23:07 [Speaker 2]
It will be multiple choice, and whoever you both get one shot at it, getting that answer correct.
00:23:14 [Speaker 2]
And I'll say three two one.
00:23:15 [Speaker 2]
I wanna hear your guess at the same time.
00:23:17 [Speaker 2]
So questions asked.
00:23:18 [Speaker 2]
Choices are given.
00:23:19 [Speaker 2]
Three two one give me an answer.
00:23:20 [Speaker 2]
So here we go.
00:23:21 [Speaker 2]
Which US state has the most freshwater shoreline of any state?
00:23:28 [Speaker 2]
Your options are Florida, Alaska, Michigan, Minnesota.
00:23:33 [Speaker 2]
Three, two, one.
00:23:34 [Speaker 4]
Minnesota.
00:23:35 [Speaker 2]
Yeah.
00:23:35 [Speaker 2]
Did you say Michigan?
00:23:36 [Speaker 2]
Yes.
00:23:37 [Speaker 2]
Oh, you are correct, sir.
00:23:40 [Speaker 2]
Nice job.
00:23:41 [Speaker 2]
Nice job.
00:23:42 [Speaker 2]
I would not have guessed that.
00:23:43 [Speaker 2]
So
00:23:43 [Speaker 3]
Thank you.
00:23:44 [Speaker 3]
Thank you.
00:23:44 [Speaker 2]
Excellent.
00:23:45 [Speaker 2]
But thanks for staying Minnesota, Cindy.
00:23:47 [Speaker 2]
I'm, going there at the end of the month, so I'm excited about going up there.
00:23:52 [Speaker 4]
Fun trip.
00:23:52 [Speaker 1]
I do
00:23:53 [Speaker 2]
have a lot of fresh water, but I think it's kind of like lakes and stuff.
00:23:56 [Speaker 2]
Land of lakes.
00:23:57 [Speaker 2]
So cool.
00:23:58 [Speaker 2]
Well, that was fun.
00:23:58 [Speaker 2]
Thank you for playing, Gavin.
00:24:00 [Speaker 2]
Thanks so much for hopping on.
00:24:02 [Speaker 3]
Yeah.
00:24:02 [Speaker 3]
Of course.
00:24:02 [Speaker 2]
Good experience, first time on Financially Fluid?
00:24:05 [Speaker 3]
Yeah.
00:24:05 [Speaker 3]
It was really good.
00:24:06 [Speaker 3]
It was very informative.
00:24:07 [Speaker 3]
I got to learn a a lot of new things.
00:24:09 [Speaker 3]
Yeah.
00:24:09 [Speaker 2]
Awesome.
00:24:10 [Speaker 2]
Sandy, our repeat offender, thanks for coming on.
00:24:13 [Speaker 4]
And it's always fun to be on.
00:24:14 [Speaker 2]
And for listeners out there, feel free to share and subscribe, like this.
00:24:19 [Speaker 2]
We'll see you next time.
00:24:23 [Speaker 1]
Thank you for listening to the financially fluent podcast.
00:24:26 [Speaker 1]
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00:24:32 [Speaker 5]
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00:24:37 [Speaker 5]
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00:24:43 [Speaker 5]
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00:24:45 [Speaker 2]
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00:24:46 [Speaker 5]
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00:24:57 [Speaker 5]
You should consult a professional adviser before executing a security trade or taking any other based on information contained in this program.
00:25:03 [Speaker 5]
Securities and investment advisory services offered through Ozaic Wealth Inc member FINRA SIPC.
00:25:08 [Speaker 5]
Ozaic Wealth is separately owned and or other entities and or marketing names, products, or services referenced here are independent of Ozaic
00:25:15 [Speaker 2]
Wealth.