Testing Breakthrough? July 30, 2020 But first . . . Here is the head of the CDC in 90 seconds saying that the risk to school age kids is one in a million. Even that one is, of course, one too many. But as concerned as parents should be for themselves — and for school staff and grocery clerks and UPS drivers and anyone else who leaves the house — at least they should be comforted that the risk of losing their kids is “one in a million.” That’s good news no one, whatever his or her political leanings, should feel compelled to reject. And now . . . Here is the solution to testing! It’s worth understanding the whole thing (17 minutes) but the short form is: those “unreliable” tests that cost just a buck and take ten minutes — you spit onto a piece of paper and see if it turns a color — are reliable enough. No, they don’t catch really low viral loads . . . but those barely detectable loads are not high enough to infect others. They do reliably catch higher loads. So, suggests this clip, why not print hundreds of millions of them and have everyone self-test frequently. If someone (including kids) tests positive, he or she should stay home until he or she doesn’t. Watch the video and see what you think. Yesterday’s post, rethinking your 401(k), suggested that — except to the extent your contributions are matched by your employer — you should consider funding a Roth IRA instead. Bob offers this helpful reaction: I read with interest the article you linked to. For higher income earners it is almost always advantageous to take the tax-deduction immediately. Your tax rate is already high and is likely to be the same or lower in retirement. However, it was clear that the examples in the article were for “median income earners”, but even then there is debate regarding which type of plan to prioritize. There are two main arguments for choosing a traditional 401(k) over a Roth, especially among the early-retirement community. The first is that you have the opportunity after you retire (early) to convert your 401(k) dollars, tax-free, into a Roth, made possible by the large standard deduction (~$12K/$24K). This gives you the benefit of the tax deduction in the year you contribute and also never paying taxes on the gain because it is converted into a Roth tax-free. Hard to beat. The second argument is that even after you begin taking your Required Minimum Distributions (RMDs), your tax rate will most likely be lower than when you were working. Early-retirement blogger Go Curry Cracker describes both scenarios in detail. There are two other possible benefits a traditional plan has over a Roth: > Net Unrealized Appreciation (NUA): This strategy allows the transfer of company stock “in-kind” from a 401(k) to a regular brokerage account, paying ordinary income tax only on the basis and not the gain (the “net unrealized appreciation”). With highly appreciated stock this can be a huge savings. Can only be done in a tax-deferred account (such as 401(k)) and not a tax-free (Roth). Here’s one article. Qualified Charitable Distributions (QCD): With a traditional IRA you can make RMDs directly to a charity, effectively making them tax-free while still taking the standard deduction. You can convert your traditional 401(k) to a traditional IRA in order to take advantage. QCDs are not available with a Roth IRA. My local public library, where I am on the board, received $60,000 of QCDs in 2019 (I’m a big fan). Read it here. Of course the right answer is not to choose but to max out both your traditional and Roth investment options.