ROTH IRA better than traditional for my situation?

I would say it is, for the obvious reasons.

Someone alluded earlier on the board that, being so young, the benefit of not paying taxes up front from the traditional IRA offset the money you put into a Roth. The whole principle behind that is the time-value of money, being able to compound more of your actual earnings and so on.

I'm not exactly sure which one is the best vehicle, but both are great tools. Need to do more research on the subject, but those are my thoughts

A Roth would be good because you can withdraw the original money you put in without penalty. As far as how much you would earn, they would likely be around the same.

1) if you company has a 401k and matches, then contribute up to what they match. Will not get a better ROI than with the match
2) if young, contribute the rest of your available funds for retirement into a ROTH up to the contribution limit
3) once ROTH maxed out, and you still have monies available for retirement then traditional IRA or 401k

quote:

---

A Roth would be good because you can withdraw the original money you put in without penalty. As far as how much you would earn, they would likely be around the same.

---

Think about tax brackets, too. Unless the rules change (they always could, but how do you predict?) money you take out of the Roth after retirement will be tax free. If your own tax rate goes up significantly by the time you retire, (and that does seem fairly likely) that can make the Roth even more attractive compared to the traditional IRA.