Core Insights - Both Dave Ramsey and Suze Orman, despite their differing financial philosophies, agree on two key retirement strategies: maximizing Roth IRA contributions and eliminating debt before retirement [2][9]. Roth IRA Advantages - Roth IRAs allow individuals to pay taxes on contributions today, leading to tax-free growth and withdrawals in retirement, which mitigates future tax rate uncertainties [4][6]. - The current core CPI inflation rate is approximately 2.5% year over year, making tax-free compounding in Roth IRAs increasingly valuable over time as it protects against future ordinary income taxes during withdrawals [5][6]. - Unlike traditional IRAs, Roth IRAs do not impose required minimum distributions for the original account holder, providing more predictable income planning for retirees [7][9]. Debt Elimination Strategy - Both advisors emphasize the importance of entering retirement without any debt, including mortgages, car loans, or credit card balances, to ensure fixed retirement income is not burdened by mandatory monthly payments [15]. - Paying off high-interest debt, such as credit card balances, yields a risk-free return equivalent to the interest rate eliminated, often surpassing returns from conservative investments [15][17].

Roth IRA Overview - Roth IRA 的定义和运作方式，包括基于收入的资格和免税增长 [1] - Roth IRA 在退休时税率较高的情况下可能是理想选择 [1]

Core Insights - The decision to switch from traditional 401(k) contributions to Roth contributions depends on individual circumstances, including tax implications and future tax rates [1][2][5] - Roth 401(k) plans are increasingly offered by employers, combining features of traditional 401(k)s and Roth IRAs, but traditional 401(k)s remain more popular due to immediate tax benefits [2][4] - Contributions to a Roth 401(k) are made with after-tax dollars, leading to tax-free growth and withdrawals, which can be advantageous for long-term tax planning [3][4] Group 1 - Roth 401(k) contributions do not reduce current tax bills, as they are made with after-tax income [3] - A hybrid approach of contributing to both traditional and Roth 401(k)s can provide greater tax diversity and flexibility in future tax planning [4] - The primary disadvantage of Roth 401(k)s is the immediate higher tax bill, which may deter some individuals from switching [5]

If you can save some of your graduation cash, a Roth IRA offers a unique chance to grow your money 100% tax-free for years—but it’s an opportunity with a limited window. https://t.co/7KQEvqSkYF ...