In simple terms, max tax-deferred (particularly if there is a match), then max Roth, then save in taxable. This will minimize tax drag.Why is Roth always better? If you can't cover your expenses by withdrawing only contributions you will pay a penalty. There is no penalty with taxable.Roth is always better or equal to taxable. And equal only when dividends are 100% qualified, gains are all long term, and you are always in the 0% LTCG bracket.
Also, what if you don't have health insurance and want an ACA plan with a subsidy. If you only have Roth, you will have no 'income' and will be forced onto Medicaid. Some may not want this.
Roth does not seem to always be better. This is the premise of my post.
If contributing to Roth means you can't put enough in taxable to retire early, then you need to work a little while longer.
Statistics: Posted by RyeBourbon — Fri Jan 31, 2025 10:03 pm — Replies 12 — Views 792