Motley Fool Money – “The Many Reasons to Roth, and How Long You’ll Live”

Date: November 15, 2025
Host: Robert Brokamp (“Bro”)
Guest: Dan Kaplinger

Overview

In this Saturday personal finance edition of Motley Fool Money, host Robert Brokamp is joined by Motley Fool contributor Dan Kaplinger to break down the advantages of Roth retirement accounts and key retirement savings considerations. The episode begins with a look at increasing life expectancy and its impact on retirement planning, then dives into why Roth IRAs and 401(k)s may offer powerful benefits both for individuals and their heirs. The discussion also addresses potential pitfalls of converting to a Roth and concludes with practical year-end planning tips.

Key Topics & Insights

1. Life Expectancy and Retirement Planning

[00:04 - 03:50]

• Many Americans underestimate how long they’ll live.
  • Survey: Most guessed 19 years after age 65 for men, 22 for women.
  • Only a third got this right; many underestimate, and 25% answered “I don’t know.”
• Importance: Accurate life expectancy is critical for retirement planning.
  • “When analyzing your retirement plan, you probably shouldn't assume the average life expectancy. After all, half of people live longer.” – Robert Brokamp (01:13)
  • Those with higher education/wealth (like podcast listeners) are likely to outlive the average.
• Suggests planning to age 95 as a default—or using tools like longevityillustrator.org for personalized estimates.

2. Wealth Trends: Household Net Worth

[01:55 - 03:35]

• U.S. household net worth is now >8x after-tax income; historic highs.
  • Historically averaged 5.5x post-WWII to 2008.
  • Main drivers: Homeowners and stock investors, especially the wealthiest 10%.
  • Positive trend: More than half of Americans with low-to-moderate income ($30k–$80k) now own stocks, mostly as new investors in the last 5 years.

3. Financial Support for Aging Parents

[03:35 - 03:51]

• Number of the week: 23%
  • 23% support aging parents financially; another 23% expect to.
  • 58% of those supporting parents have taken on debt; 74% say it hurts their own goals.
  • Personal context: Brokamp emphasizes not wanting to be a burden on his kids—another argument for diligent retirement planning.

4. Roth vs. Traditional Retirement Accounts: Five Key Roth Benefits

Discussion with Dan Kaplinger – [05:06 - 13:18]

Benefit 1: Tax-Free Withdrawals

• Roth contributions are after-tax, but qualified withdrawals are tax-free.
• In traditional accounts, “you basically have a co-owner – Uncle Sam.” With Roth, you own it all.
• Quote: “For a lot of folks … those later tax rates can be higher than what you’re paying now.” – Dan Kaplinger (06:22)

Benefit 2: No Required Minimum Distributions (RMDs)

• Traditional IRAs & 401(k)s require RMDs at age 73, whether you need the money or not.
• RMDs increase with age (3.8% at 73, 5% at 80, 8.2% at 90).
• Roth IRAs let you leave assets to keep growing tax-free.

Benefit 3: Lower Taxes on Social Security & Medicare Premiums

• Withdrawals from traditional accounts raise taxable income, possibly increasing:
  • Medicare Parts B & D premiums (income thresholds can trigger surcharges)
  • Taxability of Social Security benefits (due to “provisional income” with low, inflation-unadjusted brackets)
• With Roth, “You have the optionality to say... I’m going to take it out of the Roth and therefore not affect my Medicare premiums…” – Robert Brokamp (09:23)

Benefit 4: Easier Access to Money Before Age 59½ (Especially Roth IRAs)

• Original contributions can be withdrawn tax/penalty-free.
• “The IRS is pretty generous with that … A lot of folks end up using Roth IRAs as much as savings account as for a retirement account.” – Dan Kaplinger (10:54)
• Helpful for those wanting flexibility or who worry they might need funds pre-retirement.

Benefit 5: Tax-Free Inheritance for Heirs

• Traditional IRAs left to heirs force them to pay income taxes, often at high rates if heirs are working.
• Roths offer “up to 10 years of tax-free treatment” to heirs (though account must be emptied within 10 years).
• “The kids might be in their prime earning years... One benefit of the Roth is the heirs … get that tax-free treatment.” – Dan Kaplinger (12:26)

5. Roth Pitfalls & Considerations

[13:18 - 15:36]

• Market Timing Risk: Convert at a market peak, pay more tax—even if value drops soon after.
• Potential for Lower Retirement Tax Rate: If your bracket is lower in retirement, a traditional IRA may have been better.
• Temptation: Easier Roth access may cause early, non-retirement withdrawals.
• Big Taxable Event: Large conversions can bump up your AGI, affecting eligibility for deductions/credits, and could trigger higher Medicare premiums and Social Security tax.

“You're not only paying more taxes this year, but it may make you ineligible for all kinds of deductions and credits…” – Robert Brokamp (15:18)

6. Practical Strategies and Final Advice

[15:36 - 16:26]

• Don't treat Roth conversions as all-or-nothing; partial, incremental conversions can help you “take advantage of low tax brackets.”
• Consider timing (e.g., after retirement, but before RMDs) for optimal conversion opportunities.
• Use online calculators to model scenarios and consult a tax professional for personalized analysis.

“Little by little sometimes is the best way to get these things done.” – Dan Kaplinger (15:54) “Use a few [online tools], and then if you're still not sure, seek out the advice of a tax professional or a financial advisor.” – Robert Brokamp (16:11)

7. Year-End Tips: Contributions & Deadlines

[17:36 - end]

• 401(k) Contributions: Deadline is Dec 31; must update payroll withholding early enough.
• IRA Contributions: Deadline is April 15, 2026, but earlier is better for faster compounding.
• 2025 Limits:
  • IRAs: $7,000 + $1,000 catch-up (50+).
  • 401(k), 403(b), TSP: $23,500 + $7,500 catch-up (50+), or $11,250 extra for ages 60–63.

Notable Quotes & Memorable Moments

• On RMDs and Control:
  “When you have money in a traditional account, you basically have a co-owner … Uncle Sam. But with the Roth, you own everything.” – Robert Brokamp quoting Ed Slott, [06:50]
• On Market Risk of Conversion:
  “If you convert at a time when the market was high and then the market drops, you still have to pay the tax on the higher amount. So that can be a disappointment.” – Dan Kaplinger, [13:50]
• On Roth as Emergency Fund:
  “A lot of folks end up using Roth IRAs as much as savings account as for a retirement account. It’s kind of that optionality…” – Dan Kaplinger, [10:54]

Timestamps for Important Segments

• 00:04 – Life expectancy myths, importance for retirement
• 01:55 – Wealth-to-income ratios at all-time highs
• 03:35 – Financial stress from supporting aging parents
• 05:06 – Roth vs. Traditional: the basics
• 06:06 – Five reasons Roth can be better
• 07:07 – No RMDs with Roth
• 08:01 – Social Security/Medicare impacts
• 10:51 – Easier early access via Roth
• 12:26 – Roth inheritance advantage
• 13:43 – Four Roth pitfalls
• 15:36 – Partial conversions advice
• 17:36 – Year-end contribution deadlines and limits

Conclusion

This episode offers a clear, actionable overview for anyone grappling with the Roth vs. traditional IRA/401(k) decision. The discussion balances the numerous Roth benefits—especially tax-free growth, flexible access, and smart estate planning—against possible downsides and the importance of smart, stepwise execution. With practical examples and relatable anecdotes, Brokamp and Kaplinger encourage listeners to plan for longer lives, analyze their specific situations, and use Roth options strategically as part of a resilient retirement strategy.