- My Forums
- Tiger Rant
- LSU Recruiting
- SEC Rant
- Saints Talk
- Pelicans Talk
- More Sports Board
- Coaching Changes
- Fantasy Sports
- Golf Board
- Soccer Board
- O-T Lounge
- Tech Board
- Home/Garden Board
- Outdoor Board
- Health/Fitness Board
- Movie/TV Board
- Book Board
- Music Board
- Political Talk
- Money Talk
- Fark Board
- Gaming Board
- Travel Board
- Food/Drink Board
- Ticket Exchange
- TD Help Board
Customize My Forums- View All Forums
- Show Left Links
- Topic Sort Options
- Trending Topics
- Recent Topics
- Active Topics
Started By
Message
Do you prefer Roth IRA or Traditional IRA?
Posted on 2/28/20 at 11:31 pm
Posted on 2/28/20 at 11:31 pm
I have the option to either invest 7k into a traditional IRA and save about 1.2k on takes this year or just put 6k into a roth IRA and pay the full amount if taxes.
I would prefer to place my money into the Roth IRA as I like the idea of not having to pay taxes on gains and having my principal amount more available to me if need be in the future (with roth you can withdraw the principal if need be for other investments that may come, emergency that drains you dry, etc.)
What would be the suggestion here - Place the 7K into a traditional and save some money on taxes and start a Roth with that 1.2K or just stick it into a ROTH and pay my taxes?
I would prefer to place my money into the Roth IRA as I like the idea of not having to pay taxes on gains and having my principal amount more available to me if need be in the future (with roth you can withdraw the principal if need be for other investments that may come, emergency that drains you dry, etc.)
What would be the suggestion here - Place the 7K into a traditional and save some money on taxes and start a Roth with that 1.2K or just stick it into a ROTH and pay my taxes?
This post was edited on 3/1/20 at 4:43 pm
9
Posted on 2/29/20 at 12:12 am to tigersint
depends on how old you are
Posted on 2/29/20 at 1:04 am to tigersint
Definitely the Roth.
Posted on 2/29/20 at 1:48 am to tigersint
Roth
Posted on 2/29/20 at 7:02 am to tigersint
Depends on income as well. I make too much to get a deduction for the traditional so I go Roth.
No taxes or RMDs when I am older. I have a traditional 401(k) to lower my taxable income today. A mix of both is probably best but your situation may vary.
No taxes or RMDs when I am older. I have a traditional 401(k) to lower my taxable income today. A mix of both is probably best but your situation may vary.
This post was edited on 3/2/20 at 9:20 am
Posted on 2/29/20 at 9:10 am to tigersint
I advise a Roth for young people. You know exactly what you have saved and no tax implications. If you are in a higher tax bracket, traditional might be better. Most people will be in a lower bracket in retirement.
Posted on 2/29/20 at 10:32 am to tigersint
MAGI over 206k for married filing jointly, Roth IRA not allowed. ONLY NON DEDUCTIBLE IRA
Posted on 2/29/20 at 10:54 am to tigersint
There is no correct answer. You would have to know what the tax rate/brackets are in the future when you retire to figure which comes out ahead.
That being said I prefer Roth IRA and traditional 401k. That way you have a mix of both tax free and tax deferred accounts. For 401k, I prefer traditional because I'd rather get a tax deduction now which combined with mortgage deduction is significant for me.
Who knows what tax rates/laws will be in the future.
That being said I prefer Roth IRA and traditional 401k. That way you have a mix of both tax free and tax deferred accounts. For 401k, I prefer traditional because I'd rather get a tax deduction now which combined with mortgage deduction is significant for me.
Who knows what tax rates/laws will be in the future.
Posted on 2/29/20 at 11:10 am to gpburdell
quote:Agreed
That being said I prefer Roth IRA and traditional 401k. That way you have a mix of both tax free and tax deferred accounts.
Posted on 2/29/20 at 11:37 am to Auburn80
quote:
Most people will be in a lower bracket in retirement.
Then a traditional ira/401k is the better choice as you'll pay less taxes in the future when you take a distribution.
The younger you are this is even more likely as social security payments will probably be less than they are today which would further decrease your income.
I agree with you that most people will be in a lower bracket when they retire. Though this could change year by year as it depends on expenses and how much you withdraw.
This makes sense because in general you should need less income when you retire (O-T ballers excluded). You hopefully no longer have:
-mortgage
-retirement contributions
-health care (if u qualify for medicare unless ur really sick)
-supporting kids
This post was edited on 2/29/20 at 11:39 am
Posted on 2/29/20 at 2:02 pm to gpburdell
I'm considering opening a Roth because I have extra cash on hand, but I'd like to have access to that money in case of a major emergency. Anyone use their Roth IRA's as a place for their excess emergency funds to make money?
Posted on 2/29/20 at 2:37 pm to Athletix
Yes, you can withdraw contributions only (not growth in the account) at any time without penalty.
It’s a great vehicle for that, as long as you are looking at withdrawing money in an emergency only type situation.
It’s a great vehicle for that, as long as you are looking at withdrawing money in an emergency only type situation.
Posted on 2/29/20 at 3:15 pm to tigersint
Roth all day at these tax brackets
Posted on 2/29/20 at 9:55 pm to Zilla
I am 26 years old. I was maybe thinking to do a bit in both but will speak woth a financial advisor on Monday about it. Im leaning Roth as well as i dont have faith in the tax system when im 60.
I will say that I work in the oilfield so my tax bracket is pretty high up there. No telling what it will be when I retire but i am an entrepreneur by heart and i think that I have a pretty good chance to at some point start something or multiple forms of passive income along with my day job so I would bet on my tax bracket being either the same or higher at that point.
I will say that I work in the oilfield so my tax bracket is pretty high up there. No telling what it will be when I retire but i am an entrepreneur by heart and i think that I have a pretty good chance to at some point start something or multiple forms of passive income along with my day job so I would bet on my tax bracket being either the same or higher at that point.
This post was edited on 2/29/20 at 9:59 pm
Posted on 2/29/20 at 11:22 pm to Athletix
quote:
Anyone use their Roth IRA's as a place for their excess emergency funds to make money?
no, not when i have other sources of income, emergency/tax money in a MMF, and have a LOC. no need to use my roth for that.
Posted on 3/1/20 at 12:41 am to tigersint
quote:
I am 26 years old.
Roth
Posted on 3/1/20 at 9:40 am to tigersint
Nothing wrong with doing 50/50 between Roth and traditional.
Just remember that they won't be the same amount of money if you are attempting that. You will be putting more current dollars in the traditional than you would in a Roth.
Just remember that they won't be the same amount of money if you are attempting that. You will be putting more current dollars in the traditional than you would in a Roth.
Posted on 3/1/20 at 10:12 am to Athletix
quote:
Anyone use their Roth IRA's as a place for their excess emergency funds to make money?
Nope, only if I am desperate would I pull money out from a roth. I don't want to be forced to sell at a loss and you have a limited window to put the funds back. You could hold it in cash/bonds, but I prefer stocks in my roth.
For emergency, I have a couple things:
-6 months of expenses in money market/ultra short bonds
-Stocks in my taxable account
-Credit card/heloc
The 6 months of expenses in cash/bonds I include as part of my overall bond allocation.
Posted on 3/1/20 at 10:16 am to Athletix
quote:
Anyone use their Roth IRA's as a place for their excess emergency funds to make money?
If you do this it should be your absolute last option to withdraw.
Once you take out, you can't go back in time and put that money back in.
Posted on 3/1/20 at 2:24 pm to tigersint
quote:
What would be the suggestion here - Place the 7K into a traditional and save some money on taxes and start a Roth with that 1.2K or just stick it into a ROTH and pay my taxes?
You would need a crystal ball that allows you to know what the future tax policy/rates are at retirement, and what your income would be at retirement prior to withdrawals. You know your current marginal rate. Are you contributing to a regular 401k or Roth version or similar at work? I would think about the TIRA and Roth for the $1.2k. For all I know new Roths/contributions could be killed in the future, so maybe all in the Roth is better currently.
Page 1 of 2
Popular
Back to top
Follow TigerDroppings for LSU Football News