Basements are badly curated museums dedicated to the purchases we regret, but can’t yet bring ourselves to trash.
The table shows that the Traditional IRA would have been the better choice, producing about $3,500 more in available funds, or about 22% more. This demonstrates that the primary driver in choosing between a Roth and a traditional qualified account is a consideration of the tax rates at the time of contribution and at the time of distribution. There have been a number of changes to the tax code in the last decade that have contributed to the result, but I certainly didn’t predict any of them. If you guess wrong, you pay the price in a higher tax bill. In the example above, the extra $1,750 invested in the traditional account produced an additional $6,143.31 in earnings. The lower tax rate at the distribution of the traditional IRA results in the $3,500 in extra funds. Even though the Roth IRA had tax free earnings growth, the initial larger tax rate overcame that advantage, when compared to the traditional IRA. Because of my pension and my wife’s social security benefit, 85% of her social security benefit is taxable income, so that is not a consideration in our tax calculation. I used Dinkytown’s 1040 Calculator to run a series of estimates of our 2026 tax return to assess if we want to execute a Roth Conversion this year. We are still 4 years from taking RMDs, and I will start my Social Security in a year when I turn 70. My current thinking is a conversion of about $40,000 will keep us in the 12% bracket. There would also be a small NJ state tax impact. My simple analysis reinforces what I’ve been taught. Roth contributions make the most sense when you think your current tax bracket is lower than when you expect to withdrawal the funds. There are secondary considerations, like no tax diversification, no RMDs, and uncertainty about future tax rates. If you intend to pass the funds to heirs, it might make sense to perform Roth conversions today at the 22% tax bracket if you intend to pass these accounts to heirs who may be in their peak earnings years. Not sure? I believe I recall several HumbleDollar contributors write something about splitting the difference?
Richard Connor is a semi-retired aerospace engineer with a keen interest in finance. He enjoys a wide variety of other interests, including chasing grandkids, space, sports, travel, winemaking and reading. Follow Rick on Twitter @RConnor609 and check out his earlier articles.NO. 24: OUR ONLY earthly immortality will be the memories of others. We should make sure those memories are good—by spending our wealth on special times with friends and family.
NO. 75: IF YOU BUY and hold individual stocks or stock index funds in a regular taxable account, you can defer taxes, just like you can in a retirement account. Any capital-gains tax bill is postponed until you sell. But for this tax deferral to be truly valuable, you need super-low portfolio turnover, holding investments for 10 or preferably 20 years.
NO. 26: WE TEND to be overconfident—which isn’t a bad thing. Self-confident individuals tend to be happier, have a wider circle of friends and enjoy greater career success. Problem is, if we’re too confident in our financial abilities, there’s a risk we’ll rack up hefty investment costs and make big undiversified bets, both of which could come back to haunt us.
PASCAL’S WAGER. Belief in God is rational, argued Blaise Pascal. If you believe and God doesn’t exist, the price is modest: a less immoral life. But if you don’t believe and God does exist, the price is far higher: an eternity in hell. The lesson? When managing money, we should focus less on the odds of something happening and more on the consequences.
NO. 24: OUR ONLY earthly immortality will be the memories of others. We should make sure those memories are good—by spending our wealth on special times with friends and family.
A CRUCIAL STEP WHEN buying a preowned car is to scrutinize its Carfax report. A single-owner car with a regular maintenance history and which was driven solely for personal use should be a safe bet, while an accident record gives most people pause. All things being equal, a car that was in an accident, however minor, ought to cost less than a similar one with a clean history.
Some bargain hunters don’t mind taking a chance on a car with an accident history as long as it drives well.
Here’s another car-themed Forum post. Last June I wrote a Humble Dollar article about vehicle ownership and longevity. I ended that article with a description of the most recent major repair required for my 2011 Subaru Forester when the clutch assembly failed and required replacement. Those of you wishing to revisit that article can view it here.
I mentioned at the end of that article it might be time to search for another Subaru. At the end of 2024 I read about the introduction of a Subaru Forester option in the new model year –
MY WIFE AND I BOUGHT a used hybrid Toyota RAV4 recently. We saw it at a dealership and bought it that day.
This wasn’t an impulse purchase. We knew it was time to replace my 10-year-old Subaru Forester, and we’d done research on hybrids and electric vehicles. Because the new car would be our distance traveling vehicle, and my occasional work transportation, we wanted the flexibility of a hybrid. In time, we’ll replace our second car with an electric vehicle for local driving.
WE FLEW BACK TO the U.S. last week from Madrid, and were reunited with our car of 12 years. After selling our house in late 2022 and going nomadic, we had headed to Europe six months ago, opting to have our 2008 Lexus SUV professionally stored.
In an earlier article, I recounted the thought process behind this decision. Suffice it to say, we chose this option largely because we had no firm plans for when we’d need our car again,
WE BOUGHT A SAILBOAT and trailer in 2008 for our son for his 15th birthday. At the time, he was too young to own a boat, so I registered it in my name.
Fast forward 15 years, and we finally got around to transferring the title to our son. Transferring the boat was quick and easy. Transferring the trailer was not.
Cars, trucks, boats and trailers all have unique vehicle identification numbers, or VINs.
IN SEPTEMBER 2017, my wife and I sold our home, car and almost all our earthly possessions. We spent the next four years driving across four continents. Along the way, I learned a great deal about renting a car that, in this rental-car-challenged world, could make your travels less costly and more reliable.
1. I use Expedia, Kayak and Hotwire to compare rental car rates. When you book, pay attention to whether your reservation is free cancellation or pay now (noncancellable).
Blood Money
Michael Flack | Mar 28, 2026
Traditional or Roth
ArticleRichard Connor | Aug 29, 2026
Make the Attic Great Again
Dan Smith | Sep 1, 2026
What’s your Domicile?
William Perry | Sep 1, 2026
This would be a great posting on a web site with the name “HaughtyDollar.”
R Quinn | Aug 28, 2026
The Value of Scratch Cooking in Retirement
Mark Crothers | Jul 11, 2025
Americans and their credit cards
R Quinn | Aug 24, 2026
Percentage that “age in place”
Keith Pleas | May 24, 2026
Long Term Care
Joe D'Alessandro | Jun 22, 2024
How do you prepare for the long term care cost as retiree?
achnk53 | Jun 21, 2026
Bad Maths, Good Fire.
Mark Crothers | Aug 28, 2026
The Intentional Spendthrift
Mark Crothers | Aug 21, 2026