The Short Answer

All Things (and Tax Rates) Being Equal, Is a Roth Better?

Adam Zoll

Question: I always hear that if you expect your tax rate to go down in retirement, you should contribute to a Traditional IRA, and if you expect it to go up, you should choose a Roth. So, what do I do if I expect it to stay the same?

Answer: The question of whether investors are better off putting their money in a Traditional deductible IRA or 401(k) or in a Roth version of these accounts gets a lot of attention from financial planners (and Morningstar.com writers). For a given individual, the answer ultimately boils down to what is most advantageous in the long run: taking a tax deduction on contributions made today or being able to withdraw contributions and earnings tax-free down the road.