Ep 97The Smartest and Easiest Way to Retire a Millionaire (Step-By-Step)
What's really beneficial about a Roth IRA: your contributions are never locked away
It's kind of like a zero interest savings account that you can have access to.
Shimon Willig
The Smartest and Easiest Way to Retire a Millionaire (Step-By-Step)
with Shimon Willig
If you're going to do nothing versus opening up some sort of retirement account, clicking on a target date fund, automating a certain amount of money to go into that, you are light years ahead of somebody who's just sitting and doing nothing.
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Quotes
“It's kind of like a zero interest savings account that you can have access to.”
“If you don't deal with it, the lasting legacy of the family is going to be fights.”
“However early you approach your parents about it, your kids will approach you five years earlier.”
“You don't have to put, you could put $10 in.”
“Why would you risk your down payment for your house to make 2% or 3%?”
Takeaways
- 1 Roth vs traditional: Roth if you expect higher income later. Converting a traditional IRA to Roth adds the whole amount to that year's taxable income, so it's best done in a low-income year, with your accountant involved.
- 2 Roth contributions (not the growth) can be withdrawn anytime without tax or penalty. That gives nervous savers the confidence to contribute more.
- 3 The IRA contribution limit ($7,000 in 2025) is shared between traditional and Roth IRAs, per person.
- 4 IRA beneficiary designations override your will.
- 5 A brokerage account is as safe and accessible as a bank account at a major firm. Money is available one business day after selling.
- 6 One S&P 500 fund already holds about 500 companies weighted by size. The difference in cost between SPY and VOO is small, so don't sell and pay taxes just to switch.
- 7 If your investments are diversified and you don't need the money on a set date, you may need less idle cash for emergencies. Money needed on a fixed date shouldn't be at risk.
- 8 UTMA custodial accounts: a child's long-term capital gains can often be realized at a 0% rate within kiddie-tax limits. He prefers them to 529s for flexibility.
- 9 $1,000 at birth plus $100 a month invested could grow to $50,000-100,000 by a child's wedding.
- 10 Our community has raised over $50 million for families who lost a breadwinner without life insurance. That money should have come from insurance payouts.
- 11 Clients are often anxious about money regardless of wealth, usually because of how they grew up. Clarity about what they can afford is part of an advisor's value.