Host: Would you rather pay taxes sooner or later? That answer is a little bit different depending on what you’re talking about, especially when it comes to retirement accounts. We’ve got Ben Fuchs, a certified financial planner and founder of Fuchs Financial, here with us to tell us why paying some taxes upfront can maybe help you out later, and how you can make it work for you. So, Ben, as always, nice to see you. Ben Fuchs: Thank you. Honored to be here. Host: Well, we’re talking a little bit about, obviously, when you pay your taxes, but what do Roth IRAs and IRAs have to do with that? Ben Fuchs: All right. So with the Roth IRA, you pay the taxes up front. So if you put $5,000 into a Roth IRA and it grows to $1 million, great. You get no tax deduction for putting the $5,000 in, but all that other growth, that whole $995,000 of growth, can all then be tax-free. With the traditional IRA, you put in $5,000, you get a deduction the year you put that money in, but all that growth that you get, you have to pay taxes on when you take it out. So the longer that money is going to sit inside of an account, the younger you are, the more that money is going to sit and grow, the better off you are paying the taxes earlier. Host: Okay, so you kind of just answered that. Ben Fuchs: I try to anticipate your question and answer them. Host: You knew where I was going. Ben Fuchs: You saw it. You went to that direction. Host: But yeah, you just mentioned the younger folks who are starting their financial planning and retirement accounts. That Roth IRA sounds like a much better option. Ben Fuchs: Without a doubt. The younger you are, certainly anybody in their 20s, 30s, 40s, you really do want to be looking to the Roth IRA. A lot of my clients tend to be in their 50s and 60s, but we still look at doing Roth conversions for those people because there comes a period where you’re working, you’re making maybe more money than you ever have right before you retire. Then you retire and you have an opportunity at a much lower tax bracket to pay some of those taxes. So that’s when we do something called a Roth conversion. We pay the tax on the money in the IRA to move it into Roth, and then let it grow tax-free again. Okay. Fun stuff. Host: Okay. Who would you suggest that for? Ben Fuchs: Well, so it depends. I mean there are definitely people that shouldn’t do it. There are times when your income’s going up. There’s a lot of different rules when it comes to financial planning, and it gets more and more complicated as you go. But one of those things is an RMD. So, required minimum distribution. When you turn 73, you’re forced to take money out of your account. And my general rule is that if you’re forced to take out more than what you’re going to spend anyway— Host: I was going to say, how much money are you forced to take out? Does it depend? Ben Fuchs: It depends. Every year the percentage goes up. And if you look at the IRS table, it’s just this big, huge spreadsheet of numbers. Host: And that’s why people hire you. Ben Fuchs: Yeah. Because nobody wants to look at that. Nobody thinks about like 4%. So if you’ve got $1 million in your IRA, you have to take out about $40,000 a year and then add that onto your taxes. Well, if you’re not going to spend that money, then you’re going to have to take it out anyway. Well, maybe we’ll get ahead of it. Maybe we’ll do a conversion, move that money into a Roth IRA ahead of time, and then not be forced to take it out when it comes time for your RMDs at 73. Host: Okay. And then how does that impact your portfolios? Ben Fuchs: Well, you want to talk about different types of investments, different types of accounts. When you have an IRA, you’re eventually forced to take the money out. So you might want to be a little bit more conservative with some of that money. The Roth IRA, you might not ever need to touch, so you can be more aggressive. You could be 65 years old and still treat that money like you’re a 30-year-old. You can still be very aggressive with that money because you’re not forced to take it. Host: I’m sure people are thrilled with that. Ben Fuchs: Well, some people really love the risk and some people hate it. Some people are not there. But it’s up to the client. Everyone’s different, and our goal is just to help put them in the best position we can. Host: So this time of the year, at the end of the year, people start playing with their IRAs. Why this time of year? Why does that happen? Ben Fuchs: Because a lot of people want to do it in the beginning of the year, and I get that. But from working with a lot of retirees, things come up throughout the year like, “Oh man, my kid needs money. We have to put a new roof on. All of a sudden we have to spend way more money than we expected.” And so when we get to October and November, December, we know what we spent for the year and we can have a little bit more control over the taxes. Because if we take too much, then all of a sudden we could be paying more tax on Social Security, or we could be paying Medicare penalties. There are little things that you have to worry about that you need to figure out, and this is the time of year to do it. Host: All right, Ben. We also want to mention Fuchs Financial was voted Best Financial Management Company in the 2025 readers poll conducted and published by the Hartford Courant. If you’re looking to get your retirement plan reviewed or want help building a strategy, Fuchs Financial can help. 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