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We were having the same discussion at work this week.

Consider this, if you make $100k in 2013 as a married couple, you will pay 25% in federal tax by shifting dollars from a traditional IRA to a Roth.

OTOH, if you are retired and pull $100k from a traditional IRA in 2013 with no other income, you would pay $11,800 in federal tax or 11.8%. In this simplified scenario, a traditional 401k wins by a landslide.

Due to our tiered tax system, we are likely pay a lower tax rate in retirement if you have little other income.

Of course, RMDs and future tax rates add uncertainty.

My advice, go all Roth if your marginal tax rate is 15% or less. Go with a mix of Roth and traditional if your marginal rate is 25% or more.

-murray
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