May I have your thoughts on this question, please?
If I am currently in the 15% tax bracket and doubt that I will ever be above that.
About six years until retirement at age 60.
My question:
What advantage would a ROTH IRA be over just saving the same money in a regular taxable saving account considering I will never be in a different tax bracket?
Just wondering what other's thoughts on this would be.
IRA Questions, please
February 1st, 2012 at 04:43 pm
February 1st, 2012 at 04:54 pm 1328115281
And if just for your use, it really comes down to when you want to pay the taxes, now or later? Later you'll be paying 15% on earnings and contributions...not just contributions as you would with a Roth.
February 1st, 2012 at 04:56 pm 1328115419
If you put that money in a taxable investment, you will be taxed every year on whatever money you make in that account.
So a ROTH is better! It's such a powerful way to save money that they put some low limits on how much you can invest each year.
February 1st, 2012 at 05:15 pm 1328116536
If you were asking about regular IRA versus ROTH, and were single, I'd probably advise the regular IRA considering your circumstances.
But you are asking about ROTH versus taxable account. There is just no comparison.
CCfree also mentions your heirs. In addition, since you are married, if one of you becomes widowed or divorced, your taxes could go up significantly. There is a HUGE "single penalty" in the tax code these days. You need less than $35k taxable income as a single to stay in 15% tax bracket, and would lose half your deductions (exemption, standard deduction). So the ROTH is generally better for you, your spouse and your heirs.
February 1st, 2012 at 06:19 pm 1328120398
February 1st, 2012 at 10:02 pm 1328133756