Sean Mullaney

And I think a lot of Americans have to think long and hard before sacrificing the upfront tax deduction.

Now I will say it's usually beneficial to invest that tax savings in a Roth IRA or a taxable brokerage, but boy, that is a upfront benefit.

And it turns out that the progressive nature of taxation going back up through the brackets means that it's very likely that on the way out, the marginal rate on that is gonna be less than the rate that you enjoyed on the way into the traditional 401k.

Now, Robert, I will say one thing though.

I'm not anti-Roth,

particularly for those in the audience that have access to either the so-called backdoor Roth IRA or the mega backdoor Roth IRA.

So these are transactions that allow higher income earners to get money into a Roth account.

I tend to really like those once we've maxed out our traditional 401k say at work,

For many workers, why do I say that?

Trade-offs.

Traditional 401k, that 24,500 in the year 2026.

Well, the trade-off there is I either deduct at my highest marginal rate today or I put it into the Roth 401k.

The problem with that trade-off is I'm giving up a tax deduction at my highest marginal rate today.

But the backdoor, whether it's the so-called backdoor Roth IRA or the mega backdoor Roth IRA, if you have that through your 401k or other plan at work, the trade-off profile is so much better because there's no sacrifice tax deduction.

The money that goes into these backdoor Roths is money that would have otherwise gone into a taxable brokerage account.

Now, that's not a terrible outcome to invest in a taxable brokerage account, particularly in a low yield world with qualified dividend income rates.

But there's still tax on the dividends, interest, future capital gains on that versus if we can take advantage of one or both of these backdoor techniques.

Well, guess what?

We've moved money that would have gone into a taxable brokerage account, would have spit out a 1099-DIV every year, and instead it's parked inside a Roth account, growing tax-free for the rest of our lives, potentially the rest of our spouse's lives, potentially 10 more years, assuming it goes to our adult child beneficiaries.

So I'm certainly not anti-Roth, but I think you have to step back when you're in your accumulation years and think about the trade-offs and are you really going to pay high taxes on most of that money in retirement if it's in a traditional retirement account?