To Roth or Not to Roth...

….that is the question. We get asked this all the time by our members.

And we always answer with question:   Will your tax bracket in be higher now or in retirement?

If it’ll be higher now, then DON'T do a Roth.

If it’ll be higher in retirement, then DO do a Roth.

It's that simple.

A Roth (IRA or 401k) allows you to pay taxes now instead of later.  So pay your taxes whenever your tax bracket will be lowest.

if your tax bracket will be lower in the future, then pay your taxes then. Or if your taxes are lower now , then pay your taxes now by contributing to a Roth.

But wait a minute, what about the tax-free growth that comes with a Roth?  That's gotta be worth something, right? 

Nope.   Doesn't make a lick of difference.  And more on that next week… (I'm such a tease, aren't I?)