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No. of Recommendations: 1
Can and should are two different questions.

I am a bit skeptical about how good a Roth will be for most people because they can end up taking paying taxes now in their prime earning years at a relatively high marginal tax. If the tax laws in retirement are anything like they are now, then you will really want to have at least $50K or so in taxable income because of the standard deduction and the low tax rates for the first segment of your income. Unless you are on track to have that much taxable income in retirement then I would favor having a larger taxable IRA/401k for your core retirement savings.

Even if you are on a high income career track, I would still make sure that you fund your core “I’m not going to eat dogfood” retirement money first before worrying about retirment taxes and a Roth. The problem is that “life happens” and a career setback or health problem could cause you to retire on less than you expect. I’ve seen this happen a number of times and it isn’t always due to bad events. If you get to be in your 40’s or 50’s and are able to retire early comfortably and safely with a modest lifestyle then working for a few more decades just to be richer when you are old may not seem worthwhile.

If you do get to retirement and are exceptionally well off then you can still roll the money into a Roth.

It is not a clear cut choice and the idea solution is to have a mixture of account types. Even if you are anywhere near rich, having some money in a Roth will be nice for help in years that you have higher expenses, like when you buy a car or house.

Greg
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