this is where I'm confused a little. what if..... I'm completely retired when I start making withdrawals from my roth. my only income is from other retirement accounts. will my tax bracket really be that high? Once I retire from my job, I would think it would drop back down. No?
I know it's been stated but you aren't taxed on your gains. Too me that's the best part of it.
Let me give a hypothetical example to see if I understand it correctly:
You make $50,000 a year and contribute the max of $5,000 to a Roth. Lets say down the road near retirement that $5,000 has grown into $50,000. You get the $50K tax free
since you already paid taxes on the intial $5K.
Where as without a Roth you could payroll deduct the $5,000 and save on annual income taxes but uncle sam will tax the hell out of that $50,000 when you withdraw it.
Is that right????