No. of Recommendations: 2
Tax rates, despite what the Republicans are telling you, are at a 50-year LOW. With our yen for spending and our deficit there ain't no where for these rates to go but up.

I generally agree with this part.

I sleep better at night knowing that's not yet another unknown I must factor for when planning my retirement.

The problem here is that what matters for the Roth vs. traditional decision is your personal tax rate, not overall tax rates in general.

Some people have high incomes but got a very late start on retirement savings. For them, a traditional might make sense. They're in a high bracket now, but even if tax rates move up, they could easily be in a lower tax bracket in retirement.

Generally, I suggest a balanced approach. Get some retirement savings in traditional accounts, some in Roth accounts, and some in ordinary accounts (with no special retirement tax breaks). That let's you pick and choose what works best for you each year. If you only have one type of account when you get to retirement, you might get lucky and have picked the right one, but you might not. With a balanced approach, you might not make what is, in hindsight, the best choice, but you are also unlikely to have made the worst choice either.

Roth. All the way.

With some thought on the ideas above, I think you'll see that is just too simplistic for general advice. It's right for some, and very wrong for others.

--Peter
Print the post  

Announcements

The Retirement Investing Board
This is the board for all discussions related to Investing for and during retirement. To keep the board relevant and Foolish to everyone, please avoid making any posts pertaining to political partisanship. Fool on and Retire on!
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement