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Author: JAFO31 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 75524  
Subject: Re: 403 v 457 Date: 3/22/2011 12:18 AM
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ptheland:

<<<With a Roth, you're betting that your marginal tax rate in retirement will be at least what it is now.>>>

Ray: {{{Based on personal experience, this is a **really** good bet.}}}

Peter: <<<Based on my personal experience, I'd disagree. There is a very wide distribution of incomes (or expected incomes) in retirement. You need to look at the individual situation to make a recommendation about Roth vs. traditional IRA/401k.>>>

Ray: "But I'm surprised at what you say. As far as I can tell, we are much better set than most of our (also retired) friends & neighbors, w/r/t taxable income. Which is one pension & 2 SS's, and one of our SS benefits is significantly higher than the average benefit (acorrding to the SSA).

We started all three early (before FRA), so the benefits are all reduced.

And absent the IRA-to-Roth rollovers, our income is well below the $68K that's the max for the 15% bracket.

We do have a mortgage (which most of our neighbors don't), so we get that small deduction, and we have a large cap-loss carryover, so we get that $3000/yr deduction. But still.....

Ahhhh, but maybe you are talking about non-joint filers?"


I think that you and peter are talking past one another. Your last post is making peter's point for him.

Why make a Roth contribution (and pay taxes) when in a higher bracket while working? The traditional contribution, assuming deductibility, is worth when in a higher bracket while working than the tax rate that will be paid on withdrawals at retiremet.

Regards, JAFO
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