Let’s start with something slightly uncomfortable.
Everyone loves Roth IRAs.
Financial advisors love them.
Podcasters love them.
Instagram money gurus treat them like the ultimate retirement hack.
And here’s the quiet part out loud:
For many business owners… they’re wildly overused.
Not bad.
Just misunderstood.
A Roth is built on one massive belief:
That today’s tax rules will stay the same for the next 20 to 40 years.
That’s not conservative planning.
That’s optimism.
Remember when Social Security was promised to be tax-free?
Fast forward.
Up to 85 percent is taxable today.
Same promise.
Different reality.
So when someone says, “Roth withdrawals are tax-free forever,” a fair question is:
According to who? And for how long?
When you contribute to a Roth, you pay taxes at your highest marginal rate today.
Not your average rate.
Your top rate.
For many business owners, that’s 30 to 40 percent or more.
Put $10,000 into a Roth?
You might send $3,000 to $4,500 to the IRS right now.
That’s not free money.
That’s a prepaid tax bill.
Meanwhile, most entrepreneurs are in their highest earning years while building. Later in life, income often drops.
Yet Roth logic assumes you’ll be in a higher bracket later.
Maybe.
But “maybe” is not strategy.
Yes, Roths don’t have required minimum distributions.
Cool.
But if you take traditional deductions, invest the tax savings, and manage withdrawals strategically, you can often come out ahead even after RMDs.
Traditional money gives you flexibility:
Roth money?
Tax paid. Decision locked.
And if tax rules change?
You don’t get a redo.
No.
But it is oversold.
Roths make sense when:
They should be a calculated move. Not a default button.
“Just do Roth. It’s tax-free.”
That’s marketing.
At Calculated Moves, we plan with control, flexibility, and math. Tax-deductible strategies first. Employer contributions next. Roth only when it truly fits.
Because you have better things to do than gamble on assumptions.
If this made you uncomfortable, good.
That’s where real strategy begins. 🚀
Please follow us on Facebook and Instagram. Please make sure to check out our blog and our website link below. Subscribe to our YouTube channel and hit the bell to be notified when we post. Email me at donna@calculatedmoves.com.
Donna Bordeaux, CPA with Calculated Moves
Creativity and CPAs don’t generally go together. Most people think of CPAs as nerdy accountants who can’t talk with people. Well, it’s time to break that stereotype. Lively, friendly, and knowledgeable can be a part of your relationship with your CPA, as demonstrated by Donna and Chad Bordeaux. They have over 50 years of combined experience as entrepreneurial CPAs. They’ve owned businesses and helped business owners exceed their wildest dreams. They have been able to help businesses earn many times more profit than the average business in the same industry and are passionate about helping industries that help families build great memories.