Deep Dive into Retirement Accounts

Episode Description

Confused by retirement account acronyms? Kim and Emily demystify IRAs, Roth IRAs, 401(k)s, and Roth 401(k)s, explaining exactly how each account works, their tax advantages, and—most importantly—how these accounts work together to maximize your retirement savings. Bonus: a farmer’s market seed analogy that finally makes the tax difference crystal clear.

Episode Summary

Kim and Emily walk through traditional IRAs, 401(k)s, and Roth accounts, explaining how each works and why they matter. Traditional accounts offer tax deductions now but require taxes later, while Roth accounts flip the script—pay taxes upfront, never again. The real strength shows up in retirement when you can pull from both account types to control your taxable income and even affect Medicare costs. Kim shares the Roth IRA’s origin story, while Emily discusses her recent Roth 401(k) decision. They explain which tax bracket fits which account type, clarify required minimum distributions, and make the case for custodial Roth IRAs for teenagers.

“Do you want to pay taxes on it now, or do you want to pay taxes on it later?”