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Greetings, Davidholl, and welcome.

<<Scenerio 1.
$2,000 paid into a Roth IRA for 30 years.
10% return.
$560 tax paid (28%) each year.
At the end of 30 years you have $361,886 to retire on.

Scenario 2.
$2,000 paid into a regular IRA for 30 years.
10% return.
You invest the $560 tax you didn't pay and earn 10%.
At the end of 30 years you have $361,886 in your IRA.
Assume you withdraw over 10 years at 15% tax rate.
Your tax is $5428 in the first year.
You also have $101,328 in your second account that was funded from your tax savings of $560 each year.
As you can see, even a secure CD will more than pay the taxes on your withdrawl from your IRA, and, you'll still have the $101,328 in case you live longer than 10 years after retirement (a good bet).

Rule #1. Every chance you have to defer taxes - do it!
You will spend or invest your money much better than the government will.>>

Aside from the fact that you ignored taxes on the "investment" of the $560 annual tax, your analysis is correct. BUT -- Only for those who will see their tax bracket fall from 28% to 15%. For those who remain at 28% or for those who see a drop from 31% to 28%, the Roth wins out every time when they pay the tax to fund the Roth at the full $2K. In the next week I will post several analyses showing the impact of Roth contributions over the years and for converting existing IRA to the Roth. You'll understand better when they are up. In the interim, be aware there is no blanket answer to which vehicle is better. It's something everyone has to evaluate based on individual circumstances, and what may fit you doesn't necessarily fit everyone else.

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