On more comment on the Roth vs. traditional debate:
When people do comparisons, they are mostly considering "good" scenarios. I am invested in 100% tax deferred accounts, and it's true that if I stay employed until my 60s, earn and save significant amounts, and see solid investment returns, I could have mid 7 figure invested assets and a big tax burden on RMDs.
However, there are so many things which can happen in between:
1) unemployment/underemployment
2) disability
3) divorce
4) get burnt out at work and want to retire early
5) major financial loss (natural disaster, lawsuit, medical bills not covered by insurance)
6) Unexpected obligations (taking care of sick relative/child)
I think it makes sense to invest in traditional early in life during your prime high-earning years and consider switching to Roth or doing roth conversions later in life if your account balances are high.
Of course, there are many scenarios where roth early in life makes sense (low income years, expected future income jump AKA a resident physician, those with big pensions coming to them, people with very high savings rate, people who will inherit traditional IRAs, etc)
When people do comparisons, they are mostly considering "good" scenarios. I am invested in 100% tax deferred accounts, and it's true that if I stay employed until my 60s, earn and save significant amounts, and see solid investment returns, I could have mid 7 figure invested assets and a big tax burden on RMDs.
However, there are so many things which can happen in between:
1) unemployment/underemployment
2) disability
3) divorce
4) get burnt out at work and want to retire early
5) major financial loss (natural disaster, lawsuit, medical bills not covered by insurance)
6) Unexpected obligations (taking care of sick relative/child)
I think it makes sense to invest in traditional early in life during your prime high-earning years and consider switching to Roth or doing roth conversions later in life if your account balances are high.
Of course, there are many scenarios where roth early in life makes sense (low income years, expected future income jump AKA a resident physician, those with big pensions coming to them, people with very high savings rate, people who will inherit traditional IRAs, etc)
Statistics: Posted by blimp — Thu Nov 06, 2025 10:33 pm — Replies 49 — Views 12886