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Investing/Strategies / Retirement Investing
|Subject: Re: Roth or regular IRA||Date: 4/4/1999 12:24 AM|
|Author: Rayvt||Number: 9666 of 76237|
<<Well, in that tax bracket, it's likely that you can deduct your IRA contributions, so I'd go with the regular IRA for a while.>>
Maybe, maybe not. Probably not.
The point has been made (www.ricedelman.com and www.fairmark.com) that a Roth is *bigger* than a regular IRA.
When you put $2000 in a regular, it's $2000.
When you put $2000 in a Roth, it's equivalent to putting in $2777 (28% bracket) or $2353 (15% bracket).
In both cases, you have $2000 to invest. But when you withdraw the money, some (28%) of the withdrawal from the ordinary IRA gets siphoned off to taxes, but none of the ROTH withdrawal does.
In effect, you can put a larger amount of money into a ROTH than a regular IRA.
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