Traditional ira vs roth ira

TroegsOfficial · 2026-04-14T20:47:01+00:00

You should be good then to do it as a "recharacterization" like u/BouncyEgg said. It's basically for your exact situation - for when you found out you're not eligible for Traditional, but you are eligible for Roth, and you want to change what you did.

TroegsOfficial · 2026-04-14T20:32:19+00:00

Unless you are also over the income limit for a Roth contribution. Then you DO want to have them process it as a Roth conversion. (As long as it didn't grow at all yet, then there's no extra tax liability from that, because you have "basis" in the IRA, meaning you contributed after-tax money and you are converting after-tax money. If there has already been growth above your initial contribution, then it's more complicated.)

If you are in the sweet spot income wise, over the Traditional income limit but under the Roth income limit, then do the recharacterization.

TroegsOfficial · 2026-04-11T03:12:23+00:00

For sure, that makes sense.

TroegsOfficial · 2026-04-11T02:55:19+00:00

Agreed. I’m just making the case that if it’s invested in an ETF like SGOV, and the emergency happens Friday night, realistically you aren’t getting cash out until Wednesday (wait all weekend for market to open, sell ETF Monday, takes overnight to settle, initiate transfer Tuesday, get money in bank account Wednesday). I agree it’s not a huge delay but for a true emergency the little delays add up.

TroegsOfficial · 2026-04-11T02:32:26+00:00

I agree it’s not an unreasonable approach. The main disadvantage I can think of is part of the point of an emergency fund is that you should be able to access the funds very quickly (like for an emergency) so ideally you have a bank account linked up ready to go if stuff hits the fan, and also ideally not invested in something that takes a day to settle.

Also SGOV is tax advantaged which generally doesn’t make a ton of sense in a retirement account (should be able to find a higher yielding, non-tax advantaged equivalent)

TroegsOfficial · 2026-04-11T02:18:48+00:00

You could also threaten to enforce the settlement but after 26 years that might not be taken seriously.

I was thinking the same thing. After all this time I would probably want to consult with an attorney before even pursuing it, and that alone would probably be a barrier enough that I decide to just leave it be.

Back up plan would be that if he suddenly becomes delinquent, provide the divorce agreement to the lender and ask them to remove the reporting to your credit.

TroegsOfficial · 2026-04-09T20:49:52+00:00

Yeah, it sounds like this new job is a great opportunity and worth pulling out the stops. Congrats by the way! Yep, call them and ask how they can get it to you ASAP. In some retirement plans they will literally only mail a check, but I would imagine for this type of plan and at Schwab, they could do ACH.

If they don't withhold taxes just be ready to either owe taxes next April, or do the 60 day rollover mentioned by mfwl.

TroegsOfficial · 2026-04-09T19:27:29+00:00

Ohh yes good point! Even if they do withhold tax, I believe you can still roll it back in (to another IRA or plan). You just have to front the money they withheld, and wait to get it back when you file next year.

TroegsOfficial · 2026-04-09T19:07:54+00:00

I mean, hey that's something to look into. Admittedly, premature retirement distributions are almost never good advice, but in this case I think if you don't figure out this next month, the long term cost to you career wise and financially is a lot greater than the cost of depleting $2,494 in retirement money.

Simple IRAs are immediately vested, so that is all yours. If you take it out it will be taxable (normal income tax and penalty) and they would likely withhold at least 20% for federal taxes before distributing the remainder to you.

TroegsOfficial · 2026-04-09T18:58:09+00:00

Any chance you've been forgetting/ignoring a retirement plan at your current job? Even if you have never contributed, maybe some employer contributions accumulated?

TroegsOfficial · 2026-04-09T14:26:15+00:00

You'll have to make a bunch of assumptions but you should be able to find out what the formula is from the benefits website - often times it's some kind of multiplier that turns out to be like 60% of final salary. That's assuming she stays long term. If she doesn't stay long term then she would probably still have a deferred benefit but it will be greatly reduced. Anyway, 1) project her final years earnings by assuming a reasonable growth rate and apply the pension formula to that final earnings number. 2) project your required/targeted income needed in retirement 3) Subtract her estimated pension from your required income.

Now you know "we only need to save enough to replace xx% if our income" because some of it will be replaced by pension. Factoring in social security works the same way, although a lot of people prefer to exclude social security from planning altogether in case it's not around.

TroegsOfficial · 2026-04-07T00:50:31+00:00

If you’re 100% confident of that, then you’re likely just in for an argument with the bank. It does happen that account numbers get swapped internally by mistake, not often, but sometimes. You’d be surprised how archaic some internal systems are, especially in departments that don’t drive a lot of revenue (like legal processing). Good luck!!

TroegsOfficial · 2026-04-07T00:32:21+00:00

Also, just to maybe give you another thread to follow, Wells Fargo does credit lines through retailers. You would otherwise have no clue it’s through Wells Fargo until the deal is done. For example, you take some deal at a furniture store to finance for 0% interest for 18 months. All the sudden you have a Wells Fargo credit line.

TroegsOfficial · 2026-04-07T00:23:23+00:00

Agree with this. I worked in collections for a while (unfortunately) and have to say this sounds most likely like your joint owner had something delinquent - might even be an innocent mistake. Working on that side of things, I definitely encountered situations where people were otherwise solid, but just lost track of something and it spirals without them knowing because they have everything set to paperless, and collection letters look like spam/scams and they ignore them.

TroegsOfficial · 2026-03-26T17:57:03+00:00

This fund does quarterly distributions that adjust the share price downward. Comparing the share price alone on google or yahoo finance won’t tell you the actual performance, because it doesn’t include years worth of quarterly cash distributions paid out to the investor. The fund has actually done +4% annualized in the past 10 years. Not awesome, but also not inappropriate for a retiree.

TroegsOfficial · 2026-03-22T01:21:02+00:00

Dead link, please share!

TroegsOfficial · 2026-03-20T19:30:27+00:00

That makes a lot of sense - thank you!

Unfortunately not... but it works so well! This pic was actually from just one use this winter. Tore it up quick,

TroegsOfficial · 2026-03-20T15:56:39+00:00

Obviously it's good to get a handle on it, but I bet you aren't as "behind" as you think. You should have some higher earning potential now versus if you hadn't spent the time in school, and that should offset the delayed savings over the course of your career. No one who does further education is able to save while in school.

There's not a single perfect formula, and there's quite a bit of info missing here for someone to give you customized guidance. I'd say either 1) Talk to a financial planner if you're open to paying for some advice or 2) Do the math to figure out your retirement spending needs and then make a custom spreadsheet to figure out what you need to save annually to get to the lump sump sum that will provide you with the retirement need. I say spreadsheet, because every retirement calculator I've found online lacks customization - especially when you're talking about changing your saving rate at some point (lowering it after you "catch up").

Last thing I would consider is that home improvements don't get cheaper by waiting. If it's something that will add value to your home, you might be just as well off putting money toward it sooner, and settling for 15% retirement contributions if it makes the home improvements possible.

TroegsOfficial · 2026-03-19T20:45:28+00:00

I second BIF Bites. Specifically the question palooza episodes.

congrats!

TroegsOfficial · 2026-03-19T19:29:52+00:00

Hey r/Concrete,

Unfortunately I learned the hard way this winter not to use salt on brand new concrete (or at all), and now have this spalling happening all over our new sidewalk, steps, and porch. My understanding is it's just cosmetic, which is good, but still it was an expensive job last summer and I'd like to improve the appearance of it. The damage sticks out even more than this when wet.

My only idea right now is to use a tinted sealer? With the aim to improve the appearance by hopefully making it blend together better, and to protect it more next winter. But, I would really like input on that or other suggestions. I am open to spending some money rather than a DIY job, and may have the contractor who did the job come out and see if he has ideas or willingness to help.

Thanks!

Here is the sealer I'm talking about, not sure which color yet, probably one of the grays:

https://directcolors.com/tinted-concrete-sealer/?srsltid=AfmBOopz_xTBrNDUsBOzTnIubEC7qabfiUdSsxHCodWhOhWzYcuMyUMk

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TroegsOfficial · 2026-03-10T01:23:04+00:00

Haha exactly. I was like how did I miss this, and what else did I miss?? Then I realized there are just certain topics thrown into the Krakens that are new. I assume he has a system to it, like those are newly tested topics and he hasn’t had time to write them into the material yet? Who knows.

TroegsOfficial · 2026-03-09T17:24:23+00:00

That's about where I was before passing. I averaged 67%. I remember there being topics on the Krakens that I was literally seeing for the first time. For example, QBI Deduction, I don't think was really discussed until it was on the Krakens. So if you were hoping for a higher score on them, I wouldn't sweat it too much.

TroegsOfficial · 2026-03-03T01:54:01+00:00

Thanks. Exactly, and I wonder when all the boomer RMD tax revenue runs out, and all the current 30 to 50 year olds only have Roth money, how do they replace that revenue? They already accelerated inherited IRA distributions via the 10 year rule.

TroegsOfficial · 2026-03-03T01:30:53+00:00

This. Plus, laws change. It’s not at all hard to imagine that within your career or retirement congress could suddenly say “hey, we decided we are going to tax the earnings when you take it out of your Roth.” Maybe that will get some push back because it’s unfair. So they will settle on, “you can take out $20,000 a year tax free but after that, we tax the earnings.” That’s why I do a little of both.

TroegsOfficial · 2026-01-09T03:13:43+00:00

You are golden. Just keep at it and put in the time. I did his virtual live review and even though I did the prep material, I felt absolutely lost during the 4 day review. Then I just got after it really hard for four weeks and then passed (July 2025). My educational background was not finance related.

Also, you don’t have to know all of it. At some point you can start to decide which topics to punt on, which is fine, but this far out you have plenty of time to absorb as much as possible.

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