401k vs IRA: Why You’re Choosing The Wrong One

Welcome, everybody. In today's video, I'm going to talk about what is better to build retirement, an IRA or a 401k. And which account will help you retire as soon as possible. This is an exciting topic because we all want to live a little less stressed, have a little more financial security. And I know that times are tough, costs are up. But if we can generate and create more wealth for the future and to be used even sooner than that, possibly, I want to break that down and give you some hope and some planning that makes sense and it's practical. Now, my name is Mark Kohler. I'm a CPA attorney, entrepreneur, real estate investor, bestselling author, blah, blah, blah. But number one, I am out there on Main street just like you, trying to build wealth and trying to just work as hard as we have to sometimes. At least it feels that way, right? Well, I'm going to do Q and A here. I want you to ask questions about your IRA, about your 401k, your day job. Do you have a small business? Do you have a solo 401k? Whatever. We're going to break this down for the next half hour, and I want to be a huge, huge resource to you in this crazy conquest. All right? Now, which one's better, an IRA or a 401k? Now, they're both great, and in the long run we want to do both. But sometimes we don't have all the money in the world to do both at the same time. There might be those up years where we can put away more than years where we can't put away anything. And that's what I like about the IRA or 401k compared to life insurance. I can choose when I can really throw down and participate and dial it back, when I've got other life situations where I can't put down as much money. So the nice thing about an IRA and 401k, I'll just say, is that ultimately, if I can do both, I'm doing what's called the Mega Backdoor Roth or the mega backdoor Roth 401k. I have other videos about those. They're down in the links below. But what do we do tomorrow? What are the first things we can do that are easy and straightforward? So the first one is, this is your first major tip. If you have a day job and the company does any sort of 401k match, usually it's around 3 to 4% of your salary. Your first line of defense is to always calculate that amount, go to HR and Say I'm contributing at least that amount because when the company matches it, you just doubled your contribution. That's 100% rate of return. Now when you look at long term rates of return and the performance of your 401k putting in that double amount right out of the gate, that's a big deal. That really drives the ROI on your overall investment. So number one rule, 401k is best when you have a match at work, play in the match and then what I say is, get out, do the match and get out. And you say, well, Mark, on my paycheck, I can put more away. I, I could just choose to do that. Yeah, that's not always the best move because your choices at work of what you can invest in are generally going to be very, very limited. And the costs and expenses of a 401k are not cheap. Read any of Warren Buffett speeches or talks or books on this and it's a big deal. So number two tip, after you do the matching out, number two, fund your individual Roth IRA. Now this year, if you're under age 50, you can do 7,000. If you're 50 or older, you can do 8,000 or. And that's the starting point. So I want you to start with those amounts which are going to be, you know, an average of 600, $700 a month. And I'm going to put that away into a Roth. Now right now. I know some of you are already rolling your eyes. I get the comments. Some of you like, hey Mark, that's nice. An extra 600amonth. Where the hell am I supp supposed to get that? Well, I just recorded a video on this last week where I'm reaching out to you, giving you a lifeline on this. We can't reduce our costs hardly anymore. When we look at the cost of living, housing, travel, food, groceries, utilities, how cheaper can we get? I know there's a, and there's only one way to make it happen. Increase the top or decrease the bottom. And so I know that so many Americans are trying to just reduce costs and eat less and live a lesser quality of life because of the costs. So what is your option, people? I know you may not like to hear it, but I've got some medicine. I'm going to try to give some sugar with this. Start that side hustle. I'll tell you this right now. I was a janitor for seven years. I was trying to get through school. I had a child under and ultimately I had twins. So we had three kids under three And I was trying to get through school and I couldn't make enough per hour to pay the bills. So I started to be a janitor. So I'd go out to dentist, office, little restaurants. I even ultimately started trying to go into grocery stores. And I said, I'll clean your place. An average little doctor's office is going to pay 500 to $700 a month to go in on a Wednesday and empty trash and then go in in the weekend and clean the bathrooms and vacuum the building. I've did that for seven years. I tried to make ends meet by being a janitor. And I'm not above it. I don't care. And if some of you are, like, how do you make an extra 600amonth? I don't know. Do you have two evenings a week for a couple hours, maybe three, where you could go clean a little office or a little strip mall operation? People, it's out there for the taking. Don't let illegal immigrants or anyone else take these jobs away from you. If you want to make 500 bucks, $1,000 a month, I can make it tax free. On top of that, we can write off home, office and auto, computers, electronics, your cell phone. This is why I love side hustles. The first thousand a month, I can almost make that tax free. I can almost do it with every client. So I'm still on point number two. I know some of you need to get out of debt, some of you need to make ends meet. Others of you might be having a great year and you're like, oh my gosh, Mark, tell me more. I'm getting there. I'm just saying, step one, get the match, get out. Number two, fund your Roth, your Roth ira. Now let me just give you a couple numbers here that are fun too. If I just do a $7,000 a year, that's about five to six hundred a month that I pick up that little job at night, not working for someone else, starting a little side hustle, mowing lawns, being a landscaper, moving snow, being a janitor, selling something online. People get creative, do something you were passionate about and you love. If I can put away $7,000 a year and I'm under age 50 and I maybe say I'm in my 30s or my, my 20s even, and I can do that for 20 years. Seven grand. Seven grand every year. In just 20 years, you're going to have $500,000 tax free. Half a million. If I can just be putting away that 5 or 600amonth, it's like clockwork. That's on a 10% ROI, which is very doable because we're going to talk in a minute about self directing. If I do the 401k combo and I'm going to come to that a little later too, I can put away 2 million tax free. In that 20 years, $2 million tax free atmosphere, it's doable. This is how the rich get richer. And it's working those extra jobs or extra businesses to just pay off the debt and start plowing away the money. If I'm 50 or older, I'll give you 15 years. So it's going to be a little more challenging because I'm over 50 now. I got to save some more money. 15 years, that 8,000amonth. I'm sorry, 8,000 a year, about 700amonth. I can have 300 grand in 15 years. If I couple it with the 401k, I can have 1.5 million tax free in 15 years. If you're 50. Thinking of what I'm going to have when I'm age 65 and trust me, Social Security is going to barely pay your car payment and some rent if you're lucky. I have got to start putting that money away. All right, so those are some examples here. And I want to answer questions here. Beat me up. Bring it. Number one, I'm going to do the matching out. If I don't have match at work, I'm going to start with my ira. I'm going to put away my IRA every month. That Roth ira, the gross tax free, comes out tax free. Amazing. And I'm going to start letting time do its thing. Now. Third, if you're able to do that, you get your match and then you do your IRA. Now we're going to come back to the 401k. Now if you have a side hustle, you can have a solo 401k. You can do your own 401k and still have a 401k at work. You can have both. Now this year, if you're under age 50, I can put another 23,000 into that 401k, that's a couple grand a month. Now if your business is doing well and you're like, okay, can I do enough to put away my IRA? 500amonth and then another couple grand if I really bring on that other client or that other project or that other revenue stream and plow that away in 20 years, you got 2 million tax free. This is the combo. This is what the rich do. They take The Roth, they take the 401k, they pick and choose and then when you have a good year, bam, you throw down on both. Now, if you're over age 50 this year, you can do $30,500 on top of the IRA. So that's 38,500. If I do that for 15 years, I've got 1.5 million. So that's step three. I want to combine the two. When I have a good year. I know again, I know. Don't, don't even type the hate mail. I get it. You're like, mark, where in the hell are you finding this money? I'm finding it. Picking up another side hustle or a small business driving Uber driving doordash. I'm doing something online, I'm selling, consulting on upwork, I'm cleaning an doing the hard, doing the work at night to make that extra money, to make a difference in my life 5, 10, 15 years from now and to pay the bills next month. We can do it. You can do it. Now number four, next step is I want to self direct. Now what self directing means is that when you go back and fund that IRA, you can invest it however you want the work 401k, they're going to give you limited options. But in my ira, I can invest it however I want. I can buy crypto, I can buy options, I can do real estate, I can do notes, I can partner with others. Unbelievable. Super cool in that Roth ira. Then if you're an entrepreneur and you go back to your solo 401k, you can self direct that as well. If you quit your job, let's say you've got an old 401k from an old job you quit or your current one, you can roll that 401k out to the IRA and invest it however you want. This is where people are getting the 10, 15 and 20% returns because they're investing in what they know. That's number four, self direct if possible. And number five, to blow it up and literally have millions of dollars in the future. And it's not a get rich quick scheme, people. It's a get rich slow scheme. And that is due the mega backdoor Roth. We're talking about $76,000 in a year you can put into a Roth if you're under age 50 and 84,500 if you're over age 59. Again, some of you that are hit making it large right now, you're an influencer online and your YouTube accounts like Ching, you're like Boom. Sign me up. I need to go level. 1, 2, 3, 4, 5. I'm all in. Others of you are like Mark. I'm in debt up to my elbows, and I've got to just breathe and believe that this is possible. And I want to let you know you can. Let's work on a little side hustle to get out of debt and start building this revenue and start building your savings. And things will turn so quickly. Go binge out on Dave Ramsey. Binge out on Mark Kohler. I've got the videos. Dave has the videos. We want to help you get there. You can do it. All right, well, those are the five steps. And again, the big reveal is they're both freaking awesome. But there's some order in which we want to attack them and where it's good, we want to do both. So the IRA and the 401k are two tools in the toolbox. I want a screwdriver and a wrench. I don't want to. I don't want to just choose between the two. They don't. Some of them. I need both. I need both to really build that retirement house. I need all those tools in my toolbox. All right, well, I'm going to go to some questions here. If any of you have a question, I'm excited to have you throw down, we're here. Dana, are we ready? Who's our first question?

All right, our first question is from username Sundown Pyro. He asks at 30 years old with 100k, where would you start?

Well, there's two questions there. 100k, 30 years old. Where do I start? Well, the first thing is keep saving. See everybody, they're saving and investing. That's another point I didn't make earlier. We need to be doing both. So pyro's got 100 grand. That's awesome. He's age 30. Okay, you can throw down another seven this year. It's like you're playing Monopoly every time you pass go. You want to put in another seven, put in another seven. Oh, you got a day job with a 401k. Get the match, get the match, get the match. Oh, you're having a freaking kick ass year. You can put down a little more. Go back to the 401k. Go back to the 401k. Oh, you got a little side hustle idea. You're going to do some consulting on the side, Make a few hundred extra bucks a month. Maybe a grand a month. Great. Let's plow it into that solo. 401k. So many options. So number one, my 30 year old with 100 grand. Keep saving. Now. Now you want to invest. What do I do with that 100 grand? I want to say that I know this sounds cliche, but I want you to invest in what you know. Now that typically is not some mutual fund in Wall street where you're totally out of touch with whatever the hell the fund managers are doing and how much the fees may be buried in there, I don't know. Now, if some of you know stocks and bonds and mutual funds and ETFs and that's your. You got your forex trading whatever, and you're killing it. Great. If. If some of you know, options. I was just talking to this friend of mine two weeks ago, he was killing it with options. He's been training on it, learning on it. Made four or five grand in one day just trading options. I was, I was trading crypto the other night, just on my inside, my Roth ira. Okay, what am I doing with Seoul? What am I doing with Bitcoin? And I bought a couple other ones that were great and a couple others that sucked. But I love playing around with some crypto. I have you, some of you might be investing in a syndication, apartment buildings and real estate in a larger fund. So you might be loaning money to someone, investing in your brother in law's business, your sister in law's business. Take that hundred grand pyro and learn about self directing. Go to my podcast called the Directed Ira Podcast. Directed Ira Podcast. Watch, listen. We have, they're on YouTube and podcast watch or listen to the first 10 shows. It explains how to do it, how it's easy to do, and this is how you can get 10, 15 or 20% rates of return. Investing in what you know, if you were right here with me and I was doing a consult, I'd go, what are you good at? What do you. If you had to make $1,000 with $1,000 tomorrow, what would you do? Well, I'd go do this. Great. Do it in your ira. Well, I didn't know I could do that. Now you do. That's what you do. That's where you invest the money and what you know. All right, next question. Dana.

All right, our next question comes from Juman and he asks, what is the Mega Backdoor Roth?

Oh, well, I'm sure my team here could put the link to the Mega Backdoo Roth video. That's a good 30, 40 minute video. But what it is, and please go watch it. It's Freaking awesome. Basically, what the mega backdoor Roth is, is in my steps. Remember, we want to get our match with our 401k, go do the Roth and then go back to the 401k. Right now you can put away $30,000 in Roth money if you're under age 50 or 30,000. 38,500 if you're over 50 or older. Okay, so that's a Roth 401k with a Roth IRA. Well, the mega is where I almost double or triple that. The Mega says I'm going to put more money in my 401k and then convert it to Roth on day two. And you're like, well, Mark, there's income limits. If I make too much money, I can't do that. No, you can. You can. It's called the backdoor method. There's no limit on how much you can convert to a Roth. There's just limits on how much you can put in a Roth unless you go back door. So if you want to get into the Roth party and you get shut down at the front door, we take two steps and we're in the back door. And so the backdoor mega Roth means I can put away $76,000. Yes, $76,000 in a Roth combination between Roth 401K and Roth IRA this year. And if I'm 50 or older, 84,500. And we help clients do it every day now. Yes. Are you in the 1% bracket with the ability to put away 100k? Yes. I get it. It's not for everybody, but you can work towards that. So we go Back to our five steps, match back to the Roth, back to the 401k, self direct and double down to the Mega. That's where we go. We take our time, take our time. There's no rush. Dana, next question.

All right, next question is from Wendy, and she asks, how do you decide between a Roth 401K versus a traditional 401K?

Great question. Every 401K has two buckets now, and 10 years ago, this was not the case. But with legislation and all the broker dealers and big banks, and we set up solo 401ks for clients every day at our law firm around the country. You need a solo 401k, go to kkoslawyers.com is down below. You can just get there for a grand or less. You can get into a solo 401k with your small business, which could be driving Uber. I don't. I have clients that make 60 grand a year driving Uber now. So what can you supplement with the Uber driving or doordash and then put that in a 401k? You can do that. Okay. But anyway, so what was that question again?

The difference between Roth 401 additional.

So when I go to set, I get so excited, everybody, I set up my 401k. When you put the money in new, with new legislation, you can put, you can choose, you can say my deferral, I want it to be Roth, or I can make it traditional. If you make it traditional, you get a tax deduction. You don't pay tax on that money, it grows tax deferred. And someday you pull it out, you pay tax. That's the traditional piece. In fact, we could whiteboard a little. Can we, can we go whiteboard? Let me just show you how this kind of looks in a, in a 401k. You can design it. So the 401k is like a bucket. And so in this bucket you can have your. And I'll just do this as if you're under age 50. So you're under age 50, you can put away your $23,000 and you can choose do I want it Roth or do I want it traditional? Then the company is going to match and we don't know what they're going to match. That's that other question. And then you can do this other $46,000. That is called an after tax contribution. And almost every 401k in the country has this. And it's very weird. Some of you are like, I've never heard of that. Why would you do an after? Because what it means is you paid taxes and then put the Money in your 401k. You didn't get a write off. Why would you ever, ever do that? It wouldn't make sense. Unless that's day one, day two, you convert to Roth. So you're going to go convert to Roth. And so now I can do 23,000 in Roth and I could do 46,000 in Roth. The match the company put in for me. And I don't know what dollar amount that is yet, but once they put that in, I can convert that to Roth as well. Now when I convert that to Roth IP tax. So this bucket, when you add in the Roth ira, this is, my friends, the mega backdoor. This is the 401k piece. This is the Roth piece. This is the mega. Cause the mega means I'm gonna take this entire amount and start investing it. Not everybody does it. It's okay, freak I can count on one hand how many years I've done this. But what you do is you start with the match, and then you go to the Roth, and then you go back in and then back up. La, la, la. So in a 401k, I'll just say this in general, you can have half Roth and half traditional. This, you're going to pay tax on the way out. This one, you pay tax on the way in, and then it's tax free forever. In the long run, this one always wins. The Roth always wins. The more you increase the roi, the more it wins as well. Because we don't know what your tax bracket is going to be in the future. Here we can choose our tax rate, convert to Roth, and we're off to the races. So that's the difference. All right, next question.

We have a question here from Josh who says, what are your thoughts on a deferred sales trust?

Well, a DST is essential, and this is not the Delaware statutory trust. See, this is kind of funny. You got Delaware statutory trusts that are built really for real estate and 1031 exchanges. The DST is a deferred sales trust that acts like an installment sale. So let's say I have a business and I'm going to sell it for a million dollars. If they pay me that million dollars, I might pay tax on that entire million. Who knows what my basis is, what I put into the business? But they pay me a million, I sell my business, I got to pay tax on that million. Well, a deferred sales trust says, well, we're going to put the business in a trust with a third party trustee. They're going to sell the business for you and then give you a stream of income over time. You're still going to get the million, but you get to dial it up or down and get that million over time. So that means your tax bill is going to be spread out, meaning you're going to save taxes by basically the time value of money. So you're really saving more money because you're paying tax in the future. Not all up front. The IRS doesn't love these. They can like to call them sometimes monetized installment sales. And those are on the IRS Dirty Dozen. So DSTs are an aggressive area. I'm not saying they don't work. The IRS has not completely shot them down. We don't do them at our firm. But my biggest problem with the DST is they're so darn expensive, because the financial advisors or the attorneys that approve these for the Clients want a percentage of the business sale. Why not just charge your hourly rate and do it? Well, they hold you captive and charge huge fees. And for a glorified installment sale, that's risky with the irs, I don't touch it. So not saying they're not. I'm not saying they don't work, they're expensive, and I. They're just not for me. But they're out there. Do your homework. Next question.

All right, our next question comes from Laowai. Translation says, can your solo 401k part. Can your solo 401k partner with your IRA on a deal? If yes, can your 401k use leverage or don't recourse loan, but your IRA does not? Will that be. Will that deal be subject to udfi?

Okay, boy. I was going to say yes and yes and then maybe and no and yes. Okay, so here's the answer. And let's go to the whiteboard, what they're talking about, which is super cool and is very doable. So the first answer is yes. Let's say I want to go buy this little rental property. I don't have any money, but I got some money in my IRA or 401k. So let's have fun. And let's say this rental property is 500 grand, okay? And I'm going to short term rental it, long term rental it, whatever. So I've got this cool little rental property and I want to go buy it. Now, if I put down 20% with a bank, then I'm going to have to put down 100 grand. Okay, fair. So I'm going to have to come up with 100 grand, and I may not have 100 grand. So I can form an LLC and my LLC can be owned by my. In fact, I'm going to change this around a little bit. I want to get this a little higher up on the paper here. Okay? So I'm going to take this LLC and it's going to be owned by my 401k and my IRA, and I'm going to put in 50 grand here and 50 grand here. And now I've got my $100,000 in the bank account of this LLC, of which you can be the manager. You're not going to pay yourself. You can't take a salary, you can't stay in the rental, but you could be the manager and write the checks and manage the llc. And the LLC is going to buy this property. Oh, but can I get leverage in this situation? Yes. The problem is a non recourse loan and we've got lenders. We can send you a list of lenders all day long. They're out there everywhere. They're going to want typically 40% down and a 10% reserve. So if you're going to go buy a $500,000 property, you're going to need 250 grand in cash to do it and then the bank will loan 40%. So it's very doable and we have clients do it all day long. Now we have to change the facts. Then you're like, Well, I need 250 grand. So let's say my 401k has 200 grand and my IRA has 50. Okay, now we got to change the ownership percentage. So this is going to be C25. This is going to be a 20% ownership and it's going to be an 80% ownership because this has to be pro rata based on this deal. So your IRA in your 401k are still partners in an LLC based on how much money they put in. And you went out and went to a bank and you put down 250 grand and they loaned or. Well, I guess I said 40%. So you. 40% of 500 grand. Anyway, you're working with me here hopefully. And then I'm going to go out here and I have my reserve and I'm going to go buy this rental property. All of the rent goes into this llc. Tax deferred, tax free. I don't know. Is this a Roth IRA? Is it a Roth 401K? See, these are other little questions. This is why I want you to go listen to the directed IRA podcast. We break this all down. But anyway, the rent goes into the llc. It's not taxed to you. You could have terrible credit. You're not a, you're not a partner, you're not on the loan, nothing. This is a deal between your 401k and your IRA. Now the last question in there was, would there be what's called udfi, that's unrelated debt financed income. UDFI would apply to the Roth, it would not apply to the 401k. Now I'm not going to go into that conversation with the our short time here today on the podcast or the live. You can study up on the udfi. We have a whole podcast on that as well. But that's when you leverage your 401k. There's no tax to the 401k, but there would be tax to the IRA if there was taxable income. Whole other Topic. So anyway, we've got ways around that too. We call them blocker corporations and all sorts of strategies. All right, our next question.

Praveen wants to know how deferred compensation retirement benefit works.

I love deferred. Now I'm going to assert. Well, okay, there are all sorts of deferred computers, plans and strategies out there. One of them, the most common is called a DB plan. It's like a pension plan called a defined benefit plan. It allows you to put away even more and you can self direct it and they're pretty amazing. And so I guess I could go mega mega so you could go IRA 401k mega backdoor Roth. Oh, and I'm going to drop a DB plan on top of mega mega. And you can do that. We have clients do that. Now you're talking about uber wealthy people that do that. So I'm hoping you're watching my YouTube channel loving me because you are making that much money. If you're thinking about deferred comp, start with the Roth, start with the match, stick with the Solo 401K. If you're making that freaking much money that you want to talk about deferred comp, next level strategies, call me after you can show me you've did all the basics. It's kind of funny. It's like, it's like you go to a restaurant and it's like, I want to go straight to the dessert menu. You got to have your meal first. Mom and dad always made you eat your beans first and do the basics first. Then you can have dessert. Don't focus on the dessert. Let's have our basics first. Maybe a couple more questions.

We have a question about the mega backdoor from William. In a mega backdoor, can you pay the taxes out of the amount you're transferring or do you have to pay the taxes out of pocket?

Out of pocket, out of pocket. You can't. The Roth IRA or Roth 401K cannot. It could take a distribution to pay the taxes, but then you're paying tax or penalties on the distribution to pay the taxes. So it's a circular problem. So you. So if you're going to put away, let's say 76 grand into a mega backdoor Roth, you're going to need 100 grand of income to do it because you're going to, let's say, pay 25 effective rate tax to get the 76 grand and then drop it in. But the beauty is you'll never pay tax on that again, ever, ever. And so this is why you want to kind of backdoor into it. When a client says, hey, Mark, I want to do the bank of backdoor Roth. I'll go, how much money do you have to set aside? They'll go, well, 50 grand. Okay, we can do up to 50 grand. Now, is that before tax or after tax? Well, I haven't paid tax on it yet. Okay. Okay, so maybe it's more like 35 or 40. Okay, well, let's start there. Just because you can't do the mega backdoor doesn't mean you can't do a mini backdoor. Just. Just go as far as you can and keep building. Keep building, keep building. All right, next question.

Next question comes from Bob. He says, does a designated Roth 401k have a. An income cap?

Does a designated Roth 401k have an income cap?

It comes in two different comments. Does a designated Roth IRA have an income cap? And then he responded again, designated Roth 401K.

Well, you might be bringing up two separate. Those are both good questions. They're actually different. What. What's her first name? Bob. Okay, now what Bob is saying, everybody is, hold it. If I make too much money, I can't put in a Roth. That's the big lie. That's the big mistake. Yes, if you want to go into the front door to do a Roth, your. If your income's too high, yes, there's a designated amount. I don't have my calendar here with me. I'll tell you, but it's. No, not a big deal. Yes, there's an income limit, but if I make a non deductible IRA contribution, go around to the side and convert it to Roth, I'm back in the party. So your income doesn't matter. I have clients that make $5 million a year and still put money in a Roth. Because when you do the backdoor method, and you can do it at any income level, any age. So I know Bob is asking two different questions. He really is. He's saying, is there an income limit with a Roth ira? Yeah, if you go in the front door, but no limit on the back door, and anybody can go to the back door. I've got videos, podcasts, and books on this, for crying out loud. Go check them out. Then he said, is there an income limit on the Roth 401k? Not even on the front door. You can do a Roth 401k all day long, get the match, and then put in your. The after tax contribution and convert that to Roth. There's no Income limits inside the 401k. So Bob, the answer is good for both of your questions. Next question.

Next question is, when you earn about $200,000 a year, is it better to maximize the 401k, reducing the taxable income or put some in IRA and then convert it to the Roth backdoor IRA apparently doesn't reduce the taxable income.

That's right. Now I'm going to give you a hard answer here you might not like. I don't care if your income's 100 grand, 200 grand, 400 grand, 800 grand, do the Roth. Don't go after the write off. It's not worth it. Because as you invest that money and start growing it and you get even a 10 or percent or more rate of return, the Roth wins every time. You're like, mark, but I need the write off. No, you don't pay the damn tax and never pay tax again. I know it's hard because you're like, I gotta rip the bandaid off now. Yes, rip the band aid off now. And that skin is protected forever. I know there's no tax ever, so. And I know there's a certain school of thought out there. Well, what's your bracket now and what's your bracket gonna be in the future? We don't know what your bracket's gonna be in the future. And then we gotta look at your rate of return. Yeah, I'm gonna self direct and get a 10 or 15% rate of return. The group that's advocating the deduction are not the people advocating self directing, I'll tell you that right now. So if you want to get big rates of return, invest in what you know, do notes, do real estate, do crypto, invest your retirement account the way you want to, you will always win with the Roth. Pay the damn tax and go Roth. Don't worry about the deduction. You're going to love that Roth in the future. Trust me. Never, ever, ever had a client regret it. Last question.

Last question comes from Hari says, Can you roll over after tax ira contribution to a solo Roth 401 in your own business?

Can I roll over after tax Roth

IRA, after tax IRA contribution to a solo 401k.

All right, now this is a great question and before I answer it, I need to ask you a couple things. Has this been helpful? Are you loving this? I hope you are. I love Main Street America and making money, saving money, building wealth, getting out of debt, trying to build wealth with a side hustle. If this is resonating with you, at all. Please give this a like give it a Share Subscribe Hit the bell Icon I'm not going anywhere. I try to give away any content I can every week and alive. I've got great podcasts on this and information and if you're a tax advisor or want to be a tax advisor, ea, cpa, tax lawyer, financial advisor and you want to go next level. I have the Main street tax Pro certification. 80 sections, 12 modules, weekly trainings, exams, a biannual conference, and guess what? It's cheaper than any other tax certification in America. And it's the best. Best. My community and tribe rocks. Go do a demo. We've got summer school in effect right now. Go check it out on my website. You can go to summer school and get some killer training for 50 bucks or do a demo on my program and go to school for free. Hot for teacher Van Halen. So please get over there and check that out. Now the question is, can I roll Drum roll. Can I roll a Roth IRA into a 401k? The answer is no. You can roll a traditional IRA into a 401k. You can roll Roth 401k out to a Roth. You can roll traditional money out to a traditional ira, but for some damn reason the government has not yet approved Roth. The government has not approved Roth IRA to Roth 401K. Can't do it. Not the worst thing in the world. The only thing I hate is the UDFI problem which I referenced earlier. But it's cool. Keep Investing your Roth IRA. Keep investing your Roth 401K. Combine them in an LLC. Invest in what you know, people. The world is your oyster. You control your retirement far more than you realize. Please get over to the Directed IRA podcast. Get to our Main Street Business Podcast. Subscribe Like Share I'm not going anywhere. I appreciate you being here today. I hope these questions helped you. The ira and the 401k are both awesome. The trick is the sequence and trying to get to do both of them in those good years and doing whatever you can in the tough years.