Ted Nugent, Roth, Spencer discussed on Kowal Investment Show

Automatic TRANSCRIPT

Back with sexy segment that we heard some Ted Nugent, I got a great Ted Nugent Christmas song coming up. Going into the next break. You're gonna love it, guys. That's a good tease. It's the still spit show still spits meeting Joe Still and Aaron Spitzer from the Cold Wall Investment group in the sexy segment. We talk about wealth, management and preservation. Yep. S. Oh, What I'm gonna talk about today is is what we call the mega Backdoor Roth conversion. I think John White was on last week or so. We talked a little about Rafael Reyes. Backdoor Roth conversions on one of the areas I wanted to touch on here was this mega backdoor Roth conversion which takes place in your 401 K. So just as a recap Roth IRA again, you put your money in their after tax. It grows tax free, and then you take it out. You have to pay income tax on it, So it's a It's a great tool to use. How do you get money and Roth? You could do a contribution. Um, depending upon your age six or $7000 a year, and that's also gonna be subject to income limits. So if you're if you're filing jointly it once you get near that $200,000 mark, you may not be able to contribute to a Roth anymore. Can you set up a rock to be a monthly deposit like my 401 K is that here at work? Absolutely. Um, it's just gotta be. You know, mindful of those kind of have to, though you could just contribute once every three or four months if you want. Yeah, yeah, The timing is, you know, depending upon what fits your cash flow, really your needs there. You're really excess cash. But another way to get money into a Roth is if you do a conversion with the conversion, let's say you had a traditional IRA on you want to convert $20,000 to a Roth You pay tax on that money. Now it goes into the rough, and, um, basically again, the girls tax free. It comes out tax free. Uh, The the downfall of that, if you if you have high income is that could push you into the next tax bracket. Also, that full conversion amount is going to be taxable to you. S 01 of the strategies If you have high income, um and you've maxed out your 401 K contributions again, you can contribute up to $26,000 in your 401 K if you're older than 50, So if you're playing catch up here if you have high income You can contribute $26,000. Now, let's say you had a match on top of that. So maybe your player gave me another 4000. So now you're at 30,000 year going into your 401 K. But the IRA says you can actually between your contribution nearing in your employer. You can put in a really going in the next year. If you're older than 50, you can put in $64,500. S O. Okay. You're kind of maxed out here. You've hit that 26,000 You have your input. Your employer did his share. So there's this thing called a after tax contribution amount in which your money goes in after tax into this for one K plan. Um And then any of your earnings on that are actually gonna be taxable when they come out. So one of the strategies that's used here is you. You put his much money as you can in the 401 K. So you put up to that Max of 64,500. So really, you have about 30,000 or so and after tax that went in, and then you convert that Through the Roth for a one Kate immediately. So you're really not incurring any additional taxes because your attacks on that income anyways, now you've put it in the Roth within the 401 K and it's going to grow tax free. The earnings are going to be tax free when you take it out. S so it's a really good strategy to continue to grow your money tax free. And Erin, That could be a Roth could be in addition to a 41 care, right. You're not limited to just one retirement. Yeah, this is actually speaking within the 401 K plan itself. All of these mechanics are being done in the 401 k Now now I gotta some caution here. Not all four of one K plans allow these types of things. Some don't even have a four. You know, Roth option something having after tax option s. So you have to have both of those. You'd also have the ability to do an implant conversion, So there's a lot going on there It is. That's It's really if it's something that appeals to you, if you're listening, you know, I could give you kind of the script of what to ask your HR department to figure out if this Is available within your plan, because sometimes through the hardest part is figuring out Can I do this? Because you don't know who to call you log into the website, you know, Let's just be honest. Not every HR. Person can answer that question. It depends on where you work and how big the company is, Um, real quickly. Some matches stopped when covert hit. Are they coming back? What do you guys see it out there? Yes. Oh, headline. Just the other day that they're starting to turn those matches back on. Yeah. You know, So that's that's what I'm seeing, really in the media. I haven't really been ex, you know, exposed to any clients or anybody that has not had their match over the last couple of months. So I was asking Spencer if they start you don't mind me saying this Spencer, right. He works at Wal Mart full time and They never stopped. There's 26% match. Um there are some companies I won't mention that have stopped there is in the heaven brought it back yet. I heard by all mentioned those companies. You know, I heard some good news, though to about some companies like you line they're giving out some really good year end bonuses to all their workers, A couple $1000 and No, depending upon your role, So is money. It's just an interesting environment we're in. It is because there was furlough. There's the winners. And there is the clear losers, right? Yeah, I wish that would get reported more. You know, there's a good positive news. There's a lot of companies out there that have have really been generous. Um, you know, and have given bonuses to you know their employees in Wisconsin. You guys, you guys. You guys understand the median how it works. You followed enough. If it bleeds, it leads. If there's a good cove in news report, they don't even report it. Of numbers are down there. You're only seeing the bad stuff, right? Hey, you guys making mine a quick call. Some questions have been hanging on hold. We don't have much time. But we'll quickly try to talk to Ah, Couple of you, Judy from Hales corners. Good morning, Judy. Good money. I just have a quick question. I have a 4 57 B. It's very restrictive. I only can take out the RND. But I'm wondering if I need to because of our age do changes in the home. Like the stairway and things like that. You know a machine to take us up and down the stairs. Will the 4 57 B? Let me take out more. The with the 4 57 B is I believe you would have an option depending upon your age. Are you still employed? No, we're retired, and I won't say my age. But yes, so there should be an option for you to roll those funds out of that plan on into like a Qualified account on then, from there, you'd have less restrictions on your distributions. And she barely take that cash. Is that something? I've already told me I can't do that. I can only take the RND. But I heard from other people other 4 57. They do let you work for a nonprofit and that they do let you take it out if you need to change your home. Because of your you know, you need something to get up and down the stairs..

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