Reply to Thread

Message

<blockquote data-quote="vvvvvvv" data-source="post: 2062046" data-attributes="member: 5151">The answer is... it depends... and part of it depends on if you&#039;re going to let &quot;max contribution&quot; be your max contribution for retirement.For me, the numbers are basically a wash unless I retire in a higher tax bracket if I limit myself to a max contribution of $5K/yr and assume an average 8% return. If I remain in my current bracket, they come out even. If my tax burden drops in retirement, then the Traditional works out better. If my tax burden goes up, then the Roth works out better. (These are just from various online calculators where some yield slightly different results, but the overall trend remains.)I&#039;ve heard a lot of people that I respect for their financial opinions recommend maxxing the Roth first and then hitting the next most beneficial type of retirement account, with the idea being that the Roth is a sort of minimizing hedge against tax increases. Basically, the Roth is their &quot;living&quot; retirement fund and the rest is for R&amp;R (or passing down to any deserving offspring).</blockquote>

[QUOTE="vvvvvvv, post: 2062046, member: 5151"] The answer is... it depends... and part of it depends on if you're going to let "max contribution" be your max contribution for retirement. For me, the numbers are basically a wash unless I retire in a higher tax bracket if I limit myself to a max contribution of $5K/yr and assume an average 8% return. If I remain in my current bracket, they come out even. If my tax burden drops in retirement, then the Traditional works out better. If my tax burden goes up, then the Roth works out better. (These are just from various online calculators where some yield slightly different results, but the overall trend remains.) I've heard a lot of people that I respect for their financial opinions recommend maxxing the Roth first and then hitting the next most beneficial type of retirement account, with the idea being that the Roth is a sort of minimizing hedge against tax increases. Basically, the Roth is their "living" retirement fund and the rest is for R&R (or passing down to any deserving offspring). [/QUOTE]

Verification