No. of Recommendations: 3
Like I said, I think that FOR MOST PEOPLE the primary advantage is the forced savings aspect,

Even that might be overstating the benefits a bit.

I think the main utility of a TIRA these days is not as a savings vehicle but as a rollover vehicle. I don't see many people making systematic contributions to their TIRA. I would guess that nationally, probably less than 5% of all adults systematically put money into a TIRA. Probably some site out there that has the data.

Roth might be different (and I see more systematics) - but I also think it caters to a slight different type of investor. My gut hypothesis is that your average Roth investor is more wealthy, has a higher income, and is more educated than your average TIRA investor - and absent any other experience, I would expect it to be the other way around (e.g. lower income use the Roth more).

I think we are currently experiencing the lowest tax rates (as a country) any of us will see if our lifetimes. This leads me to believe that, all else being equal, pay the tax now and avoid the tax later.

As such, I think Roths and especially Roth 401ks are outstanding options - especially with the ability to backdoor Roth contributions for those that can't deduct IRA contributions.
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.
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.