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re: "Real" value of a Roth IRA
Posted on 1/30/13 at 9:45 am to Tenforty1728
Posted on 1/30/13 at 9:45 am to Tenforty1728
I guess it depends on personal preference. I have a 401k and get an employer match so theres my tax savings right there. After the match, I contribute to a Roth IRA because 1) I like the flexibility of the account and 2) I believe I'll be retiring in a higher tax bracket than my current rate.
For people who don't participate in a qualified employer plan at work a Traditional IRA may be better because of the deduction. However, you can only take qualified distributions before 59 1/2 and your tax rates may be higher when you retire.
Well, we have $16.5 trillion of debt, trillions more of unfunded liabilities, and a President who doesn't believe spending is an issue. They're going to have to eventually raise taxes to pay for this stuff.
For people who don't participate in a qualified employer plan at work a Traditional IRA may be better because of the deduction. However, you can only take qualified distributions before 59 1/2 and your tax rates may be higher when you retire.
quote:
And isn't it hard to predict what taxes will look like in 45 years!?
Well, we have $16.5 trillion of debt, trillions more of unfunded liabilities, and a President who doesn't believe spending is an issue. They're going to have to eventually raise taxes to pay for this stuff.
1
Posted on 1/30/13 at 9:58 am to gatorsimz
The "flexibility" is an important factor. Once you have paid your taxes (Roth), you have greater ability to access the fund. If you needed money from a standard 401k, you would have penalty concerns.
Generally most people retire at a higher income tax bracket. It is best to use the standard 401k to receive co. match. Then if you're near a rate level adjustment, push to keep below the next rate. If you can't shelter at a lower rate, Roth is a great place to go.
Generally most people retire at a higher income tax bracket. It is best to use the standard 401k to receive co. match. Then if you're near a rate level adjustment, push to keep below the next rate. If you can't shelter at a lower rate, Roth is a great place to go.
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