Roth IRAs and the Fed Gov
I have some of my IRAs in Roth accounts, which is funded with after-tax money and means the government allows it to grow tax-free and you can draw that money in retirement tax-free.
Traditional IRAs offer tax savings now, and you pay taxes on your drawings after you retire. The theory is that you will most likely be in a lower tax bracket after retirement, so the "bite" will be minimized.
Of course, that fact negates some of the advantages of the Roth IRA, if your tax bracket in retirement is 10% then obviously you are not a lot better off.
But that isn't why I am posting.
I have a rollover coming to me from my former employer's pension plan, which will be initially set up as a traditional IRA. I have to decide if I want to start converting that into Roth IRAs. But I am not confident that in 20 years the Roth will still exist. That is 5 presidential terms and 10 Congressional terms. A lot can change, and nothing has a shorter half-life than a political promise.
What do you think?
Poll IRA planning
Feel free to expand on your thoughts in the comments.
Traditional IRAs offer tax savings now, and you pay taxes on your drawings after you retire. The theory is that you will most likely be in a lower tax bracket after retirement, so the "bite" will be minimized.
Of course, that fact negates some of the advantages of the Roth IRA, if your tax bracket in retirement is 10% then obviously you are not a lot better off.
But that isn't why I am posting.
I have a rollover coming to me from my former employer's pension plan, which will be initially set up as a traditional IRA. I have to decide if I want to start converting that into Roth IRAs. But I am not confident that in 20 years the Roth will still exist. That is 5 presidential terms and 10 Congressional terms. A lot can change, and nothing has a shorter half-life than a political promise.
What do you think?
Poll IRA planning
Feel free to expand on your thoughts in the comments.