I don't understand the love for Roth IRAs

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What am I missing

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diversification

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in theory will be lower bracket in retirement.

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We have a national debt issue that will most likely only be treated with even higher taxes down the road. Historically, we are currently in the lowest tax marginal tax rates there have been. I’ll take the odds that taxes will be going up over the next 20-30 years.

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What am I missing

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You were in this thread, TD thread that touches on this, so you know my stance on this, but Roth IRA's do have a time and purpose.

1. They are best used while your income is low.
2. No RMD's in retirement.
3. No RMD's for your beneficiaries like the Inherited IRA's ten year rule.

I'm retired and did not have much opportunity to use Roth's but now I convert my IRA to Roth to fill up the lower end tax brackets.

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However people at the beginning of their career I can understand the allure of the Roth 401k

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I feel like I missed window

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The tax diversification is definitely valuable. I am a firm believer in traditional 401k and a Roth IRA to get both. But definitely want that tax savings today.

However people at the beginning of their career I can understand the allure of the Roth 401k

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I agree with all this

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I use to love the idea but currently two things

1. I would rather get tax advantage now. Probably irrational but I don't trust future tax benefit.

2. I am at my highest earnings now and in theory will be lower bracket in retirement.

What am I missing

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I'm fortunate (or maybe not fortunate) to be able to max out 401ks, HSA, and Roth's. kind of the sweet spot with income I guess

I like Roths for high growth potential stocks. Not that I’m expecting to be Peter Thiel-wealthy but he put a few thousand dollars in and it’s now over $5 billion. With the help of some insider knowledge of course, as he bought pre-IPO shares of PayPal…

But the point remains, if you buy something you expect to 10x or more, you’ll be glad you bought it in a Roth. Of course the flip side is you buy riskier stocks, you won’t get to claim any losses either.

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ItzMe1972

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Let me tell you something that has cost me an ungodly amount of money.

There are some TERRIBLE CPAs. A good one is worth their weight in gold.

Taxes will most likely be higher in the future than they are now. Potentially way higher but who knows.

When you have 500k in a Roth you can be reasonably certain that you have that much money. How much will 500k be worth to you in an IRA in 25 years

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Bruh, you saying you can name one couple making $30k a month now that’s gonna be cool living on 6k a month in retirement?

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Never said that. You're making a lot of assumptions you don't realize here.

Just because someone is in a certain bracket does not in any way mean they are spending every dollar they bring home.

Also, if someone is living on $30k/month while working, some of those expenses will go away (or more importantly COULD go away if they need to cut expenses) in retirement (college savings, retirement savings, non-retirement savings, mortgage hopefully, etc.).

Lastly, once they retire, they should have built up a chunk of non-retirement assets to pull from before being required to take RMDs. Non-retirement assets can be invested very tax-efficiently and don't generate any ordinary income when distributed for living needs. You just need to be careful of interest, dividends, and cap gains on sales.

Once RMDs start, their tax bracket may go back up slightly, but in most cases not anywhere close to what they were in their earning years.

NOTE: These circumstances vary greatly depending on what assets the investor is living on - rental income from 4 different properties, for example, would complicate/negate the situation described above.