Roth 401k

Roth vs. Traditional Retirement Plans

Roth vs. Traditional Retirement Plans

As more employers incorporate Roth options into work-based retirement accounts, many of you have written to ask which one is preferable. As always, the answer depends on your situation. The big difference between a traditional retirement option and a Roth is about when you pay taxes. With a traditional option, you pay in the future and with a Roth, you pay today.

Target Date Funds and Robots, AI, and Automation

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We're kicking things off this weekend with Susan from Chicago who is in the process of reevaluating her 401(k) and is wondering which target date fund she should be using? Should she even be using a target date fund? Or are there better alternatives? 

Next up was Katrina from Alabama who is trying to game plan for retirement. Up until now almost everything has been saved in traditional 401(k) plans...should she and her husband start using the Roth feature?  

The robots are coming, the robots are coming!!

Okay, so maybe we’re not yet living in a world that looks like the movie Terminator, but it’s safe to say that changes are coming to the workforce as we know it. Robots, artificial intelligence, and driverless cars are no longer things of the distant future. They are with us today and will become increasingly common in coming years, along with virtual reality and digital personal assistants.

That’s what we’re talking about today with Darrell West, a decades-long connection of mine who is vice president and director of Governance Studies and the founding director of the Center for Technology Innovation at the Brookings Institution. In his latest book, The Future of Work: Robots, AI, and Automation, West explores the current state of the workplace, how technological innovation will disrupt it and why government policy needs to change to help workers adapt to it.

If companies need fewer workers due to automation and robotics, what happens to those who once held those jobs and don't have the skills for new jobs? And since many benefits are delivered through employers, how are people outside the workforce for a lengthy period of time going to earn a living and get health care and social benefits?

Throughout the pages of this book, West argues that society needs to rethink the concept of jobs, reconfigure the social contract, move toward a system of lifetime learning, and develop a new kind of politics that can deal with economic dislocations.

West presents a number of proposals to help people deal with the transition from an industrial to a digital economy:

  • Broaden the concept of employment to include volunteering and parenting and pay greater attention to the opportunities for leisure time
  • Workers will need help throughout their lifetimes to acquire new skills and develop new job capabilities
  • Political reforms will be necessary to reduce polarization and restore civility so there can be open and healthy debate about where responsibility lies for economic well-being

It’s a fascinating read about what faces us in the days ahead...a discussion that should take place sooner rather than later.

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Listener Questions: Real Estate, Roth 401(k), Pension, Retirement Planning

Calls, calls, calls and emails, emails, emails! Today's show is all about your questions. We're so backed up that this may become a regular thing!

Hour one kicked off with Neil from Oregon who was wondering if now is a good time to buy a house. Neil currently rents but is worried if he waits much longer he may be priced out of the market. 

Next up was Brianne from the Bay Area who was looking for some pointers as she tries to help her parents get their financial lives in order. 

The final call of hour one comes from Samantha in North Carolina. Samantha is a grad student at Duke and wants to make sure she's on the right path for retirement when she retires in May. I love super young people who are already thinking about retirement! 

We kicked off hour two with Andrea from Minnesota who was wondering if it makes sense for her to start using the Roth 401(k) option at work. 

Next was Nathan from Albany, New York who is weighing the possibility of a new job. One huge factor is that his current job has a great pension plan and the potential new job does not offer a pension. 

The final call of the show comes from Ruth in Cleveland. Only 24 years old Ruth is finding herself with more cash in the savings account than she needs. What should she do? Is there a better alternative? 

Have a money question? Email us here or call 855-411-JILL.

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"Jill on Money" theme music is by Joel Goodman, www.joelgoodman.com.

BONUS call: Roth IRA Conversion

Another week, another BONUS call where we're once again discussing the benefits of using a Roth retirement vehicle. Today's question comes from Marshall (and his daughter) in Virginia.

“Better Off” is sponsored by Betterment.

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"Better Off" theme music is by Joel Goodman, www.joelgoodman.com.

Bonus call: 401(k) vs Roth 401(k)

In what is quickly becoming one of the most common questions we get, today we're discussing the Roth 401(k) option now being offered by many employers. Should you use it if available?

“Better Off” is sponsored by Betterment.

Have a finance related question? Email us here or call 855-411-JILL.

We love feedback so please subscribe and leave us a rating or review in Apple Podcasts!

Connect with me at these places for all my content:

https://twitter.com/jillonmoney

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http://betteroffpodcast.com/

https://itunes.apple.com/us/podcast/b...

"Better Off" theme music is by Joel Goodman, www.joelgoodman.com.