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Subject:  Re: To Roth or not when making very little? Date:  8/16/2011  2:19 AM
Author:  Watty56 Number:  69421 of 88822

I am wondering if a Roth is a better way to go since I make so little, or is the money I put into the Roth taxed the same as if I was making $50,000 a month?

If that is all your income than a Roth is an easy choice but if you have other significant other non-wage taxable income like a pension, investing income, social security, etc then your tax rate could be higher than your earnings income would imply so a deductible IRA might be a better choice.

If you have the discipline to save up the money and not spend it, you could just save up the money and decide which is best for you and make the Roth or deductible IRA contribution next spring before April 15th when will know what the final tax numbers will be with either choice.

The question of which type of account is best really likely does not have one right answer for most people with more average income since the right answer is probably to have a mixture of Roth and traditional IRA accounts to give you flexibility in retirement for years when you have usually large or small financial needs.
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