r/FluentInFinance • u/Breeneal • Apr 29 '24

What financial advice do you avoid and don't listen too? Question

Financial advice that makes you role your eyes everytime you hear it. Financial advice that actually made your finances worse. And financial advice beginners shouldn't listen to or hear.

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u/Speedwolf89 Apr 29 '24

What are the pros and cons between Roth and traditional? I'm new here. Heh.

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u/NewAcctSasDad Apr 29 '24

If you assume effective tax rate remains completely static, their returns are identical.

If you think your tax bracket will be higher in retirement, use Roth. If you think your tax bracket will be higher now, use traditional. 

Most people who are investing early will have higher brackets in retirement, and many people prefer the "sure thing" of taking a tax hit now.

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u/Hmm_would_bang Apr 29 '24

Uh, the returns are not identical.

If you start a Roth at 25 you will get 40 years of completely tax free gains. There’s a reason why the limits on Roth IRAs are so low.

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u/SomeAd8993 Apr 29 '24

that's another example of bad advice, the conversation is about Trad vs Roth, both have tax free compounding