Reply To: Question: Which is better, the regular IRA or the Roth IRA?
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It is a question of pay the IRS now or pay the IRS later. Lets say there are two investors. Same tax bracket – 25%, same contributions to the IRA, same investment returns. Mr. Traditional IRAer contributes $100,000 to his IRA, his investment doubles and he has $200,000 when he retires. He pays 25% to the IRS and has $150,000 that is his free and clear. Ms. Roth IRAer over the years also invests $100,000. but pays 25% prior to investment, so her investment is $75,000, which also doubles by retirement, so she has $150,000 free and clear. Same as Mr. IRAer. As pointed out in other posts everyone’s situation is different. If you have high credit card bills now, or saving for a house, college, etc. I would go the traditional route. If you think you will be in a lower tax bracket in retirement, go the Roth route. In either case. Good luck.