Skip to main content
No. of Recommendations: 0
Unless the proponents of (i) the national sales tax to replace the federal income tax or (ii) the "flat" tax carry the day.

Alternative (i) would suggest choosing the bird in hand (current deduction) over the two in the bush (no FIT when withdrawing in retirement). Alternative (ii) would probably push everyone in the bottom 95% of AGI into a higher tax bracket (depending upon rate chosen and standard deduction/exemption), again suggesting that bird in hand may be more valuable.

Good point, and thank you for bringing that out. It was part of my point, though I didn't spell it out. Not only do we not know with certainty what our income will be in retirement, but we don't know what tax rates will be either. And those of us who aren't retired don't even know with certainty if we'll even live to retirement.

I'd also like to amend my previous post where I said that the relevant tax rates are the most important factor in determining whether a Roth or 403b is better. This factor would be overridden if there were employer-matching contributions in the 403b, as mentioned by a previous poster.

Also, I think the original question asked for help in calculating which is better. There are many financial websites that have calculators to help determine which is better, including TMF. That's a good place to start, although I'll confess to being suspicious of these things because I haven't seen one yet that didn't say the Roth was better, and I don't believe that to be the case in such a widespread fashion, based on current tax laws.
Print the post  


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.