When money comes out of a Trad IRA, it's taxed at ordinary income rates, even if the major part of a withdrawal might have been from long-term cap gains. The same withdrawal from a taxable account would be taxed, substantially, at long-term cap gain rates. But the same withdrawal from a Roth would be untaxed. Thus, it seems to me that even investments that throw off mostly long-term cap gains are better off made in a Roth than in either of the other two types of accounts.Not necessarily. You have to look beyond "will this be taxed when withdrawn?" in deciding where to keep what investments.After-tax yield in retirement is identical when deductible contributions are compared to Roth contributions assuming the same marginal rate in retirement and investment of the current tax savings. I'm a great fan of Roth contributions when the current tax rate is low, but deductible contributions get a lot more attractive as your current tax rate rises.PhilRule Your Retirement Home Fool
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