Select Page
3. Rich Retirement Planning

Welcome to Questioning Your Cents where you can get your real-world, pragmatic tax & financial advice for business owners, entrepreneurs and independent contractors.

 

We are your host Kevin Molen and Charles Steinmetz. Our job is to educate you on how to manage your money and save taxes. We hope you will use the knowledge from this episode on traditional IRA’s, Roth IRA’s and retirement accounts. We will discuss how they are different for each other and the factors to look out for when investing.

 

 

  • The main idea of using these vehicles is when you retire you have a lower tax bracket and hence you save your tax money and get a high return
  • The retirement vehicles do not matter as much how much money is invested or how it will perform, they are based on how you can enter and exit the system, which then changes your taxes.

 

 

Comparing the Vehicles:

 

Traditional IRA

 

  1. You can always add money to the IRA but depending on how much you make determines if it can be considered as tax deductible or not
  2. If you plan on making less money in after retirement (and a lower tax bracket) this can be a useful strategy
  3. Traditional IRA’s mean tax savings initially, but then the tax hits you again on a higher amount later on due to investment increases. If you are strategic and take out the money slowly, this could be advantageous
  4. After inheriting a Traditional IRA money needs to come out over 10 years and will be taxed.
  5. After you turn 72 you need to take out the money from the Traditional IRA, not all of it, but a required minimum distribution (RMD). This amount depends on many factors. If you own multiple Traditional IRA accounts, you can take money out of the poor performing account and write it out without touching the better performing accounts. Generally, the RMD amount is 3-5% of the total value of the account. If you don’t take it out then there will be a penalty of 50% of RMD, which is a very high penalty.

 

 

Roth IRA

 

  1. No tax write off can be done for money invested in a Roth IRA.
  2. In order to withdraw money from  a Roth IRA, there is a minimum of 5 years that the account must be held and if you take the money out after you turn 59 then no penalty is applicable on that money taken out.
  3. Money invested in a Roth IRA is taxed initially so no tax is taken after investment growth. This could mean huge tax savings if you plan on retiring at a higher tax bracket.
  4. If you make more than $139k/year in adjusted gross income you cannot invest in a Roth IRA. If you are married filing joint, then the limit is $260k of adjusted gross income.
  5. It is easy to transfer a Roth IRA to a child or spouse since the income has already been taxed, it will not be taxed again upon transfer.

 

 

401(k) Plan

 

  1. This type of account is normally provided by your employer and automatically deducts from your payroll
  2. The maximum that can be added is $24k annually
  3. Compared to IRA, a401(k) can have a lot more money contributed
  4. No income limitations
  5. You can’t take the money out until you retire
  6. Need to be careful in how the 401k is investing as some 401(k) providers don’t offer the best investment options

 

 

 

Contact us:

info@molentax.com

281-440-6279

 

Find us on social media:

https://www.facebook.com/molentax

https://www.instagram.com/molen.tax/

https://www.youtube.com/channel/UCTHFFst-BRli8M_aTyXhAuw

https://www.linkedin.com/company/molen-&-associates

https://twitter.com/molentax

https://www.molentax.com

http://questioningyourcents.com

 

 

 

 

Time stamps:

 

00:03:00 – Introduction

00:05:00 – What to look for in a retirement account

00:06:45 – Traditional IRA

00:15:55 – Roth IRA

00:22:15 – Roth vs Traditional IRA scenarios

00:26:00 – Inheritance of IRA’s

00:31:40 – Required Minimum Distributions

00:39:15 – How 401(k) works

00:47:45 – Comfort Zone – Questions round

00:48:02 – Benefits of filing taxes early

00:52:00 – Paying taxes after the deadline

00:56:00 – Difference between Exemption, credit and deduction

01:00:00 – Outro

Check out this episode!

The Molen & Associates Difference

Mike Forsyth

“Super helpful and timely. This is our first year with them and we look forward to trusting them with our taxes and business books for years to come.”

Caitlin Daulong

“Molen & Associates is amazing! They run an incredibly streamlined process, which makes filing taxes a breeze. So impressed with their attention to detail, organization, and swift execution every year. Cannot recommend them enough!”

Sy Sahrai

“I’ve been with Mr. Molen’s company for few years and I felt treated like family respect and dignity. They are caring, professional and honest, which hard to find these days. Love working with them.”

Corporate Transparency Act – Beneficial Ownership Reporting: Are You Prepared?

he Corporate Transparency Act (CTA), enacted as part of the Anti-Money Laundering Act of 2020, introduces significant changes in beneficial ownership reporting requirements for certain entities operating in the United States. These regulations, set to take effect on...

The IRS is Cracking Down on S-Corp Salaries: How To Your Reasonable Compensation is Safe

The IRS is turning its attention to S-Corporations (S-Corps) and the salaries paid to shareholder-employees. Ensuring that you are paying yourself a "reasonable compensation" is crucial to staying compliant with the law and avoiding potential financial consequences....

Should You Be Making Quarterly Payments?

Tackling your taxes as a small business owner can often feel like a high-stakes game of strategy and a little guesswork. One of the key moves in this intricate game is mastering the art of quarterly tax payments. If you're looking to stay ahead in the tax arena and...

Slash Your Self-Employment Tax

Hey there, hardworking small business owners! Tax season is no walk in the park, but we've got a game-changing secret to share that could put more money back in your pocket. If you're tired of paying hefty self-employment taxes and want to keep more of your...

How Tax Planning Can Help You Grow, Preserve and Protect Your Wealth

Tax planning services from Molen & Associates help you make smart decisions regarding your taxes. We provide individualized advice and information that can save you money and protect your wealth. Our tax planning strategies go beyond just filing your taxes – we...

Why a Local Family Tax Firm is Your Best Co-Pilot in Space City!

Howdy, Houston small business owners! Tax time can be a real whirlwind, but fear not – we've got your back! When it comes to saving time, money, and headaches on your taxes, partnering with a local family tax firm can be the ultimate secret weapon. In this article,...

Uncovering the Top 5 Deductions to Save Time, Money, and Stress!

Howdy, fellow Houstonians! As small business owners in the heart of Texas, we know that taxes can be a daunting and complex puzzle to solve. But fret not, because today, we're here to equip you with some mighty tax hacks that will not only save you time and money but...

Streamline Your Finances with Molen & Associates: The Power of Corporate Accounting

In the fast-paced corporate world, managing finances with precision and expertise is paramount for the success of any business. Corporate accounting plays a vital role in ensuring that financial records are accurate, compliant, and capable of driving informed...

Mastering Your Numbers: The Secret to Small Business Tax Triumph!

Hey there, fellow small business owners! As entrepreneurs, we know that taxes can be a bit overwhelming, especially when you're trying to run a successful business. But fear not – we're here to equip you with the ultimate tax-saving superpower: mastering your numbers!...

Should I Get Life Insurance For My Kids?

Should I Get Life Insurance For My Kids? No parent wants to consider the possibility of collecting a death benefit on their child's life. And this is the reason many families are exploring the option of investing in a child life insurance policy to ensure their...

Request an Appointment Today

6 + 8 =

Call us at

Pin It on Pinterest

Share This