Comments on: Traditional IRA or Roth IRA: Which is Best For You?

By: What is the Difference Between Saving and Investing?

What is the Difference Between Saving and Investing? — Fri, 18 Feb 2011 15:49:15 +0000

[...] other hand, if I am not planning to touch the money for longer than five years, I invest it. Our traditional and Roth IRA’s are examples of our [...]

By: Five Upcoming Tax Hikes and What They Mean to You

Five Upcoming Tax Hikes and What They Mean to You — Fri, 12 Nov 2010 15:09:35 +0000

[...] income into the next year.” Also, higher earners who are converting a traditional IRA to a Roth IRA may want to pay the conversion tax at the 2010 level instead of spreading the tax bill out to 2012. [...]

By: 5 Roth Conversion Myths

5 Roth Conversion Myths — Mon, 08 Nov 2010 13:42:52 +0000

[...] a portion of your regular IRA over any number of years. For example, you could convert $300,000 of traditional IRA to a Roth in six years at $50,000 per year…and pay the taxes on $50,000 each of those six [...]

By: The Best IRA for You: How to Choose

The Best IRA for You: How to Choose — Tue, 16 Feb 2010 10:18:53 +0000

[...] Roth or traditional IRA inherited by a non-spousal beneficiary. You cannot treat this IRA as your own. (If you inherit your [...]

By: » Personal Updates and Links: New Insurance for this Bada$$ Blogger | PT Money

Sat, 12 Sep 2009 12:47:38 +0000

[...] from Personal Finance by the Book wrote about the traditional vs Roth IRA. Check it out and decide which is best for [...]

By: Carnival of Personal Finance - History of College Football Edition — StretchyDollar

Mon, 31 Aug 2009 11:01:43 +0000

[...] Plemon from Personal Finance By The Book presents Traditional IRA Vs Roth IRA- Which is best?, and says, “Now you are struggling with whether you should use the Traditional or the Roth [...]

By: ABCs of Investing

ABCs of Investing — Fri, 28 Aug 2009 01:10:31 +0000

Thanks for the link.

I agree with Joe – contributions to a traditional roth are done at your marginal tax rate and withdrawals are taxed at your “average” tax rate assuming you have no other income in retirement.

This kind of analysis is quite difficult because there are so many variables. One thing that I do know is that savings of any type are generally good.
.-= ABCs of Investing´s last blog ..Investment Real Return =-.

By: Joe Plemon

Joe Plemon — Thu, 27 Aug 2009 11:52:54 +0000

Joe Taxpayer,
Thanks for your thought provoking observation. You have challenged me to dig deeper into this tax issue.

By: JoeTaxpayer

JoeTaxpayer — Tue, 25 Aug 2009 16:56:47 +0000

But Joe, deposits to one’s IRA or 401(k) all occur at one’s marginal rate (unless they are right at the bracket’s edge), while the withdrawals start at the “zero” bracket (the sum of standard deduction and exemptions) and then 10%, 15%, etc.
I dare say, the average person cannot save their way to a higher bracket at retirement, not with our history of average saving rates close to zero. Even saving 20% of our income for most of our lives, we will not have a withdrawal rate at our current marginal rate.
JoeTaxpayer
.-= JoeTaxpayer´s last blog ..Lottery Winners Going Bust =-.

By: Joe Plemon

Joe Plemon — Tue, 25 Aug 2009 16:08:48 +0000

Craig,

Thanks for reading. I wanted the information to be logical and helpful, so I appreciate knowing when it is.