"A Tax Break Hiding in Plain Sight"

Our core belief is that you’re either a Wealth Builder or a Wealth Killer. We focus on investments and strategies that build wealth. And we sidestep anything that doesn’t.

And it’s not just what you make that counts when it comes to building wealth.

It’s also what you keep.

Planning around tax savings, retirement, and the legacy you want to create for your family and other beneficiaries is crucial.

This’ll be even more important going forward for one reason: Your tax burden may head higher.

It has to at some point.

As America’s debt burden continues to build, Washington will eventually have to find ways to pay for its spending habit.

You’ll be footing the bill.

But there’s a legal strategy that may help to lessen that potential burden.

Susan Elser, a financial advisor in Indianapolis, told Barron’s that she advises nearly all of her clients to save through Roth 401 (k)s because she worries that federal deficits will force the government to increase taxes in the future.

That’s why, today, we’re sharing a timely report from Barron’s titled: “A Roth 401 (k) Is a Tax Break Hiding in Plain Sight. Here’s the Math.”

In it, you’ll see why paying taxes now could mean more money for you later.

Roth 401(k) 101

You may be familiar with a Roth IRA, where you can contribute after-tax dollars to an account, sidestepping required minimum distributions (RMDs) that start at age 73.

By sidestepping those RMDs as much as possible, you don’t have to worry about:

• Being pushed into a higher tax bracket when you take those minimum distributions.

• Losing the ability to let your money keep growing tax-deffered.

• And having to sell assets in a down market.

A Roth 401(k) is basically the same idea of a Roth IRA, as you’re “feeling a little pain now” by paying taxes to potentially avoid a lot of pain later by taking RMDs and paying the accompaying taxes.

The main difference is it’s offered by your employer.

The Plan Sponsor Council of America, a nonprofit that’s been supporting employers who offer retirement plans since 1947, says 93% of 401(k) plans offer workers a Roth 401(k) option.

Here’s a quick breakdown of the other differences between a traditional 401(k) and a Roth 401(k):

Yet, despite the accessibilty, Barron’s says only 21% of eligible workers invest in a Roth 401(k) compared to 74% of workers investing in traditional 401(k)s.

This lack of participation may stem from a lack of folks knowing they have access to a Roth 401(k), a lack of undestanding how Roth contributions work, the dislike of paying taxes upfront, or a combination of factors.

But retired Baylor University finance professor William Reichenstein shared with Barron’s why a Roth 401(k) can be a powerful vehicle for true after-tax value:

“A $10,000 Roth contribution is a larger contribution than $10,000 in a traditional 401(k). It’s $10,000 of your after-tax dollars s opposed to $10,000 of your pre-tax contribution.”

Here’s the math Reichenstein offered:

That’s 31% more for retirement, and that may even be a conservative estimate on how much more you’d have in your account. Reichenstein also said required minimum distributions could increae the portion of your Social Security benefits that are taxed, leaving your true marginal tax rate well above 40%

Certified public accountant Ed Slott, who specializes in retirement account strategies, told Barron’s that because tax rates remain historically low for now, workers should be putting as much money as possible in Roth 401(k)s.

“Most people would be better off with a tax-free retirement account,” he told the popular financial weekly. He added: “And you get it now on sale because tax rates are low.”

While that’s just an introductory overview, and you should always consult with a professional, we hope highlighting the benefits of a Roth 401(k) from the Barron’s report helps you with your own due diligence for your retirement planning.

That’s it for today.

Take care,

💡 Retirement Isn’t Just About Saving — It’s About Creating Reliable Income

You’ve spent decades building your nest egg. But once the paychecks stop, the real question becomes: How will you turn your savings into steady, sustainable income?

Here’s why income generation is the cornerstone of a successful retirement:

💸 You Still Have Bills to Pay
From groceries to healthcare, your expenses don’t retire when you do. A reliable income stream ensures you can maintain your lifestyle without constantly dipping into your savings.

📉 Market Volatility Doesn’t Stop at 65
Without a plan for income, you may be forced to sell investments during downturns — locking in losses. Income-focused strategies help you ride out market swings with confidence.

🧾 Taxes Don’t Retire Either
Required Minimum Distributions (RMDs) and Social Security taxation can eat into your income. A smart income plan helps you manage your tax exposure and keep more of what you’ve earned.

🧠 Peace of Mind Is Priceless
Knowing where your next “paycheck” is coming from in retirement reduces stress and helps you enjoy the freedom you’ve worked so hard for.

For our SPC Premium members, they can access our Income Playbook Dossier, which features two investment opportunities with yields of 8.71% and 14.78%, respecitvely.

For anyone interested in joining SPC Premium and having full access to the Dossier below, as well as our Model Portfolio, Special-Situation Portfolio, Quarterly Roundtables and much much, just click on the Dossier below and hit ‘Upgrade Today” at the bottom of the report to unlock full access and to get up and running.