Ep 18: Financial Fact or Fiction – Roths, Trusts and Life Insurance

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Sometimes the easiest way to learn about something is to make it really simple. There are a lot of assumptions out there about finances, so let’s take some time to clear those up. Like the true/false tests you might have taken back in grade school, let’s play a round of fact or fiction to test your financial planning acuity.

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Show Notes

On today’s episode, we’re talking about financial fact or fiction. From Roth to traditional 401ks, annuities and Social Security, we’ll help you separate fact from fiction in your retirement plan.

Fact or Fiction? Roth 401(k) is better than the Traditional 401(k)

This is fiction. With the Roth, you pay the tax today. It grows tax free and you withdrawal it tax free. So is the Roth the best plan? Well, it depends on what you think your tax rate will be in the future.

If you think your taxes will be higher in the future, then yes, the Roth 401k may be a better solution for you to put your money into today. Doing an income plan and projection will really help you out in this circumstance.

Fact or Fiction? You don’t need a Trust to pass investment accounts to your children

That is a fact. You don’t necessarily need a trust to pass the money that’s in your investments onto your children if they are listed as the beneficiaries. Now, you might want to think about getting a trust if you don’t want your beneficiary to get a lump sum.

Fact or Fiction? You need life insurance in retirement

That’s fiction. Life insurance is to provide a benefit to your beneficiaries to replace any income you were bringing in so they can maintain their lifestyle. If they’ve saved enough to continue their lifestyle, then there’s no need for life insurance.

Listen to the full podcast or use the timestamps below to jump to a specific section.

[3:20] Roth 401k

[5:30] Trust

[7:17] Life insurance

[9:23] Annuities

[11:18] Social Security

Thanks for checking out this episode. We’ll talk to you again soon.

“If you think your taxes will be higher in the future, then yes, the Roth 401k may be a better solution for you to put your money into today.”

-Scott Sierens

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