Episode 150

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Published on:

25th Sep 2024

Roth vs Traditional: Which is Right For You If You’re Pursuing FIRE? | E150 Rachael Camp

It’s one of the most hotly debated topics in personal finance…Roth or Traditional?

Some argue that the national debt almost guarantees higher taxes in the future and that you should choose Roth and pay your taxes now. Others argue that flexibility and low-earning retirement years should lead you to choose traditional. And of course, some “professionals” highlight that retirement accounts are a scam and you should be investing in their life insurance product to avoid taxes altogether…for the sake of this conversation, we are ignoring that one.

At the end of the day, we all know the correct answer…it depends. It wouldn’t be a controversial topic if there wasn’t nuance in the decision. Multiple factors make it a personalized decision for everyone.

In today’s episode, we dive deep into many of those factors to help you feel equipped to make this decision for your situation. To help me with this goal, I invited on my friend and CFP Rachael Camp.

Rachael recently appeared on the podcast in episode 143, so if you want to learn more about her story and her thoughts about work optionality, get that episode queued up.

In this conversation, we jump straight into it, debunking bad advice, sharing a rule of thumb to decide if Roth or Traditional is the right option for you, discuss how unique factors such as which state you live in, RMDs, and medical subsidies might impact your decision, and ultimately, a case for why this decision should be revisited every year.

So if you want to get deep into the weeds about Roth vs Traditional, this episode is for you. I hope you enjoy my conversation with the owner of Camp Wealth…Rachael Camp.

Key Takeaways:

  • The math behind bad advice
  • If taxes are bound to increase, how does that change our decision?
  • A Roth or Traditional rule of thumb based on your tax bracket
  • Changes in your life that might impact how you should be investing
  • How and why to create flexibility in your retirement accounts
  • A year-by-year approach to maximize your tax savings


More of Rachael:

YouTube: https://www.youtube.com/@CampWealth/videos

Website: https://www.rachaelcampwealth.com/


More of The Struggle is Real:

Find show notes and more at https://www.tsirpodcast.com/

Connect with Justin on LinkedIn: https://www.linkedin.com/in/justinleepeters/

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About the Podcast

FI Minded: Achieve Financial Independence & Have Fun Doing It
Achieve Financial Independence & Have Fun Doing It
Want to achieve financial independence without missing out on the fun?

FI Minded is for anyone who wants to achieve financial freedom, live life on their own terms, and, most importantly, enjoy the journey along the way!

Whether you’re just starting to think about financial independence or already deep into the process, FI Minded gives you the tools and inspiration to make FI a reality - without giving up the things you love.

Each episode, we’ll cover topics like:
*Financial Independence Strategies: Simple, actionable advice to reach FI faster (if that’s your goal).
*Work Optionality: Transitioning from the corporate grind (no more "one more year syndrome") to a life of freedom and flexibility.
*Lifestyle Design: How to build a life that aligns with your values, goals, and dreams.
*Stories from the FI Community: Real people sharing their journeys to FI and what they’ve learned.
*Fun with FI: How to save your future and enjoy your current life through CoastFI, mini-retirements, travel, or just making the most of your time.
*Fighting Burnout: Balancing saving for your future while staying mentally healthy.

Some of our past guests include:
Carl Jensen (1500 Days), Jeremy Schneider (Personal Finance Club), Nick Loper (Side Hustle Show), Andrew Giancola (The Personal Finance Podcast), Jordan Grumet (Earn & Invest), Jill Sirianni (Frugal Friends), Jacking Cummings-Koski (Catching Up to FI), Jesse Cramer (Personal Finance for Long-Term Investors), Diania Merriam (Optimal Finance Daily), Rachael Camp (Work Optional), Jillian Johnsrud (Retire Often), Sean Mullaney (FI Tax Guy), Joel Larsgaard (How to Money), Erin Lowry (Broke Millennial).
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