Old 07-01-2018, 02:46 PM
  #34  
Gunfighter
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Joined APC: Apr 2007
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There are several points to ponder regarding Roth vs Traditional.

-With a Roth you are effectively investing more for retirement, because the taxes are pre-paid. As Ted74 pointed out, 18k into a Roth is equivalent to 24k in a Traditional assuming equal income tax burdens now and at retirement.

-Roth IRA does not have a required minimum distribution (RMD), which provides flexibility in timing your withdrawals.

-Roth IRA is a better estate planning tool due to the lack of RMD.

-Having a mix between Roth and Traditional allows you to steadily withdraw from the traditional, but still take a boatload (or truck load, plane load, Porsche load, etc) all in one year without bumping up your tax bracket.

-If you expect your tax bracket will be substantially lower in retirement, a Roth may not be an ideal choice. This is often the case for those nearing retirement.

-Instead of paying the taxes up front on a Roth, it may make more sense to defer 18K in a traditional plan and invest the 6K tax savings elsewhere, like real estate, low turnover mutual fund, rare whiskey, antique guitars, collectible cars, etc.

-Like many things in life, just because you can (do a Roth), doesn't mean you should.
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