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One Of The Best Retirement Deals 9 Out Of 10 People Ignore
But, if you can afford to pay the taxes while also maxing out your tax deferred contributions they're a fantastic deal. For what should be obvious reasons, those with substantial wealth stand to benefit most from the Roth provision. And, for that reason, I suspect they will not go away anytime soon.
I max out my Roth IRA every year, and currently contribute up to the maximum company match in my traditional 401k (I have the option to contribute to a Roth 401K). As it stands my total retirement accounts are about one-third in Roth IRA, and two-thirds in traditional IRA/401K. My goal is to be able to retire at 60 (I'm 45). My guess is I will be in the same tax bracket when I retire. I like having money in both Roth and non-Roth to hedge against the unknown of what taxes will be in 15 years compared to today. Since my non-Roth accounts total more than my Roth, I am thinking of changing to contributing to the Roth 401K instead. I think it might be good to have a balance. Another thing to consider: what if you are paying state income tax during your working years, but move to a state such as Florida when you retire, and won't have to pay state income tax. In that case, putting money in a Roth might be disadvantageous.
Comments
But, if you can afford to pay the taxes while also maxing out your tax deferred contributions they're a fantastic deal. For what should be obvious reasons, those with substantial wealth stand to benefit most from the Roth provision. And, for that reason, I suspect they will not go away anytime soon.