Episode 150

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Published on:

25th Sep 2024

Roth vs Traditional: Which is Right For You If You’re Pursuing FIRE? | E150 Rachael Camp

It’s one of the most hotly debated topics in personal finance…Roth or Traditional?

Some argue that the national debt almost guarantees higher taxes in the future and that you should choose Roth and pay your taxes now. Others argue that flexibility and low-earning retirement years should lead you to choose traditional. And of course, some “professionals” highlight that retirement accounts are a scam and you should be investing in their life insurance product to avoid taxes altogether…for the sake of this conversation, we are ignoring that one.

At the end of the day, we all know the correct answer…it depends. It wouldn’t be a controversial topic if there wasn’t nuance in the decision. Multiple factors make it a personalized decision for everyone.

In today’s episode, we dive deep into many of those factors to help you feel equipped to make this decision for your situation. To help me with this goal, I invited on my friend and CFP Rachael Camp.

Rachael recently appeared on the podcast in episode 143, so if you want to learn more about her story and her thoughts about work optionality, get that episode queued up.

In this conversation, we jump straight into it, debunking bad advice, sharing a rule of thumb to decide if Roth or Traditional is the right option for you, discuss how unique factors such as which state you live in, RMDs, and medical subsidies might impact your decision, and ultimately, a case for why this decision should be revisited every year.

So if you want to get deep into the weeds about Roth vs Traditional, this episode is for you. I hope you enjoy my conversation with the owner of Camp Wealth…Rachael Camp.

Key Takeaways:

  • The math behind bad advice
  • If taxes are bound to increase, how does that change our decision?
  • A Roth or Traditional rule of thumb based on your tax bracket
  • Changes in your life that might impact how you should be investing
  • How and why to create flexibility in your retirement accounts
  • A year-by-year approach to maximize your tax savings


More of Rachael:

YouTube: https://www.youtube.com/@CampWealth/videos

Website: https://www.rachaelcampwealth.com/


More of The Struggle is Real:

Find show notes and more at https://www.tsirpodcast.com/

Connect with Justin on LinkedIn: https://www.linkedin.com/in/justinleepeters/

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About the Podcast

FI Minded - Financial Independence, Early Retirement & Lifestyle Design
Achieve Financial Independence & Have Fun Doing It
Pursuing financial independence, financial freedom, or early retirement often leads to the same questions: How do I become financially independent? How much should I save? What happens after I reach FI?

FI Minded helps you use money to create more freedom, without turning your entire life into a financial optimization project.

Host Justin Peters explores the decisions behind building a flexible, work-optional life, from reaching financial independence and navigating Coast FI and Slow FI to spending your money, changing careers, stepping away from work, and figuring out what comes after FI.

Each episode combines practical personal finance with conversations about early retirement, lifestyle design, work, spending, healthcare, self-employment, and life after financial independence. The goal isn't simply to reach FI as quickly as possible. It's to make progress toward financial freedom while actually enjoying your life along the way.

On FI Minded, you'll learn how to:
- Reach financial independence without burning out
- Build a flexible, work-optional lifestyle
- Navigate Coast FI, Slow FI, and other paths to FI
- Make smarter decisions about spending and saving
- Prepare financially and emotionally for early retirement
- Figure out what life can look like after financial independence
- Think through the tradeoffs behind major money and lifestyle decisions
- Make progress toward financial independence while actually living your life.

Some of our past guests include Carl Jensen (1500 Days), Jeremy Schneider (Personal Finance Club), Nick Loper (Side Hustle Show), Andrew Giancola (The Personal Finance Podcast), Jordan Grumet (Earn & Invest), Rachael Camp (Work Optional), Jillian Johnsrud (Retire Often), Sean Mullaney (FI Tax Guy), Jill Sirianni (Frugal Friends), Jackie Cummings-Koski (Catching Up to FI), Joel Larsgaard (How to Money), Cody Garrett (Measure Twice), Jesse Cramer (Personal Finance for Long-Term Investors), Jess (The Fioneers), Chris Hutchins (All The Hacks), Diania Merriam (EconoMe), Andy Hill (Marriage Kids Money), Fritz Gilbert (Retirement Manifesto), Maggie Tucker (Inside Out Money), Cody Berman (The Financial Independence Show), Joe Saul-Sehy (Stacking Benjamins), Doug Cunnington (Mile High FI), and and others helping you rethink how to approach financial independence.
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