How to Choose Between a Roth vs. Traditional IRA/401(k)
Introduction: The Tax-Advantaged Retirement Account Dilemma
When it comes to saving for retirement, one of the most consequential decisions you’ll face is choosing between Roth and Traditional retirement accounts. Both offer powerful tax advantages that can significantly impact your financial future, but they work in fundamentally different ways. This choice applies to both Individual Retirement Accounts (IRAs) and employer-sponsored retirement plans like 401(k)s, 403(b)s, and 457 plans.
The core difference is straightforward but profound: Traditional accounts offer tax benefits now, while Roth accounts offer tax benefits later. With Traditional accounts, you contribute pre-tax dollars, reducing your current taxable income, but pay taxes when you withdraw funds in retirement. With Roth accounts, you contribute after-tax dollars, receiving no immediate tax benefit, but enjoy tax-free withdrawals in retirement, including all accumulated earnings.
This seemingly simple distinction creates a complex decision that depends on numerous factors: your current tax situation, anticipated future tax rates, retirement timeline, estate planning goals, and even your views on tax policy. There’s no universal “right answer” that applies to everyone. The optimal choice varies based on individual circumstances and may even change throughout your career as your financial situation evolves.
This guide will help you navigate this important decision by explaining the fundamental differences between Roth and Traditional retirement accounts, analyzing the key factors that should influence your choice, exploring strategies for using both account types, and providing practical guidance for implementing your decision. By understanding these concepts, you’ll be better equipped to make an informed choice that aligns with your long-term financial goals.
Understanding the Basics: Roth vs. Traditional Accounts
Before diving into decision factors, it’s essential to understand exactly how these account types differ in their tax treatment, contribution limits, withdrawal rules, and other key features.
Tax Treatment: Now vs. Later
The primary distinction between Roth and Traditional retirement accounts lies in when you receive the tax benefit.
Traditional IRA/401(k) Tax Treatment:
– Contributions are typically tax-deductible, reducing your current taxable income
– Money grows tax-deferred (no taxes on dividends, interest, or capital gains while in the account)
– All withdrawals in retirement are taxed as ordinary income
– Effectively, you’re postponing taxes until retirement
Roth IRA/401(k) Tax Treatment:
– Contributions are made with after-tax dollars (no immediate tax deduction)
– Money grows tax-free
– Qualified withdrawals in retirement are completely tax-free, including all earnings
– Effectively, you’re prepaying taxes before investing
This fundamental difference creates various scenarios where one approach may be more advantageous than the other, depending on your current and future tax situations.
Contribution Limits and Income Restrictions
Both account types have specific contribution limits and, in some cases, income restrictions that affect eligibility.
IRA Contribution Limits (2023):
– $6,500 annual contribution limit for those under age 50
– Additional $1,000 catch-up contribution allowed for those 50 and older
– This limit applies to the total of all your IRAs (Roth and Traditional combined)
401(k), 403(b), 457 Contribution Limits (2023):
– $22,500 annual contribution limit for those under age 50
– Additional $7,500 catch-up contribution allowed for those 50 and older
– This limit applies separately to each plan type (e.g., 401(k) and 457)
– Employer contributions don’t count toward these limits
Income Restrictions:
– Traditional IRA: No income limits for contributions, but deductibility may be limited if you or your spouse are covered by a workplace retirement plan and your income exceeds certain thresholds
– Roth IRA: Direct contributions are phased out at higher income levels (2023: $138,000-$153,000 for single filers; $218,000-$228,000 for married filing jointly)
– Traditional 401(k): No income restrictions
– Roth 401(k): No income restrictions (a significant advantage over Roth IRAs for high-income earners)
These limits and restrictions may influence your choice, particularly if you’re a high-income earner who wants to make Roth contributions but exceeds the Roth IRA income limits.
Withdrawal Rules and Required Minimum Distributions
The rules governing when and how you can access your money differ between these account types, affecting their flexibility and long-term planning implications.
Traditional IRA/401(k) Withdrawal Rules:
– Withdrawals before age 59½ generally incur a 10% early withdrawal penalty (with certain exceptions)
– Required Minimum Distributions (RMDs) must begin at age 73 (as of 2023), requiring you to withdraw and pay taxes on a minimum amount annually
– Failure to take RMDs results in a 25% penalty on the amount not withdrawn
– All withdrawals are taxed as ordinary income
Roth IRA Withdrawal Rules:
– Contributions (but not earnings) can be withdrawn at any time without taxes or penalties
– Earnings can be withdrawn tax-free and penalty-free if the account has been open for at least 5 years AND:
– You are age 59½ or older, OR
– You are disabled, OR
– You are using up to $10,000 for a first-time home purchase, OR
– The withdrawal is made by your beneficiary after your death
– No Required Minimum Distributions during the original owner’s lifetime
Roth 401(k) Withdrawal Rules:
– Unlike Roth IRAs, early access to contributions is not allowed without penalty
– Qualified distributions follow the same rules as Roth IRAs (5-year rule and age 59½)
– Traditionally had RMDs like Traditional 401(k)s, but the SECURE 2.0 Act eliminated RMDs for Roth 401(k)s starting in 2024
These withdrawal rules create important distinctions in flexibility and estate planning potential between the account types.
Other Key Differences
Several other features distinguish these account types and may influence your decision:
Backdoor Roth IRA:
– High-income earners who exceed Roth IRA income limits can potentially use the “backdoor Roth” strategy
– This involves making non-deductible contributions to a Traditional IRA and then converting to a Roth IRA
– The tax consequences depend on whether you have existing pre-tax IRA balances (due to the “pro-rata rule”)
Roth Conversion:
– Existing Traditional IRA or 401(k) funds can be converted to Roth accounts
– Taxes must be paid on the converted amount in the year of conversion
– This strategy allows for tax diversification and can be particularly valuable in low-income years
Employer Matching Contributions:
– Employer matching contributions to 401(k) plans are always made on a pre-tax basis, even if you make Roth contributions
– These matching funds and their earnings will be taxable upon withdrawal
Loan Provisions:
– Many 401(k) plans allow participants to borrow from their accounts
– This feature is generally available regardless of whether you make Traditional or Roth contributions
– IRAs do not allow loans
Understanding these fundamental differences provides the foundation for making an informed decision between Roth and Traditional retirement accounts based on your specific circumstances.
Key Decision Factors: Which Account Type Is Right for You?
The optimal choice between Roth and Traditional retirement accounts depends on several key factors specific to your situation. By carefully considering each of these elements, you can make a more informed decision aligned with your financial goals.
Current vs. Future Tax Rates
Perhaps the most critical factor in the Roth vs. Traditional decision is how your current tax rate compares to your expected tax rate in retirement.
The Basic Principle:
– If your tax rate will be higher in retirement than it is now, Roth accounts generally provide greater benefits
– If your tax rate will be lower in retirement than it is now, Traditional accounts generally provide greater benefits
– If your tax rate will be the same, the mathematical result is roughly equivalent (though other factors may still favor one approach)
Assessing Your Current Tax Rate:
Your current marginal tax rate (the rate applied to your last dollar of income) determines the value of Traditional contributions. For 2023, federal marginal tax rates range from 10% to 37%, plus any applicable state and local income taxes. Understanding which tax bracket you’re in helps quantify the immediate benefit of Traditional contributions.
Projecting Future Tax Rates:
While impossible to predict with certainty, several factors can help you estimate your future tax situation:
– Retirement Income Sources: Will you have significant pension income, large Required Minimum Distributions, or other income sources that might keep your tax rate high?
– Retirement Lifestyle: Do you expect to maintain a similar spending level in retirement, or will your expenses decrease significantly?
– Geographic Considerations: Do you plan to relocate to a state with different income tax rates?
– Tax Policy Trends: While unpredictable, consider whether you believe overall tax rates are more likely to rise or fall in the future
Common Scenarios:
– Early Career/Lower Income: Individuals early in their careers often have lower current tax rates than they expect in retirement, potentially favoring Roth contributions
– Peak Earning Years: Those in their highest earning years may benefit more from Traditional contributions to reduce current high-bracket taxation
– Approaching Retirement: Those near retirement with a clear view of their retirement income may be able to make more accurate tax projections
Remember that tax rates can change due to both personal circumstances and policy changes, introducing uncertainty into this analysis.
Time Horizon and Growth Potential
The length of time until you’ll need the money affects the relative advantage of tax-free growth in Roth accounts.
Compounding Growth Factor:
The longer your investment timeframe, the more significant the advantage of tax-free growth becomes. This is because:
– In Traditional accounts, you’ll eventually pay taxes on all growth
– In Roth accounts, all growth is tax-free
For example, if a $6,000 contribution grows to $60,000 over decades:
– In a Traditional account, you’ll pay taxes on the entire $60,000 when withdrawn
– In a Roth account, you’ve already paid taxes on just the $6,000 contribution, and the $54,000 of growth is completely tax-free
Age Considerations:
– Younger Investors: Generally benefit more from Roth accounts due to longer compounding periods
– Mid-Career Investors: May need to balance immediate tax benefits against long-term growth potential
– Older Investors: May find the immediate tax deduction of Traditional accounts more valuable, especially if retirement withdrawals will begin soon
The power of tax-free compounding makes Roth accounts particularly attractive for money that won’t be needed for many years, especially for younger investors or for legacy planning.
Flexibility and Access to Funds
Different account types offer varying levels of flexibility for accessing funds before retirement, which may be an important consideration.
Emergency Access:
– Roth IRA: Contributions (but not earnings) can be withdrawn at any time without taxes or penalties, providing a potential emergency fund of last resort
– Traditional IRA: Early withdrawals generally incur taxes plus a 10% penalty, though exceptions exist
– 401(k)/403(b) Plans: Generally less flexible than IRAs, though many plans offer loan provisions or hardship withdrawals
Required Minimum Distributions (RMDs):
– Traditional Accounts: Require distributions beginning at age 73, potentially forcing withdrawals when not needed
– Roth IRAs: No RMDs during the original owner’s lifetime, allowing continued tax-free growth
– Roth 401(k)s: No RMDs starting in 2024 (previously had RMDs like Traditional 401(k)s)
Liquidity Needs:
If you anticipate potentially needing access to retirement funds before age 59½, the flexibility of Roth IRA contributions may be valuable. However, retirement accounts should generally not be viewed as short-term savings vehicles.
Estate Planning and Legacy Goals
Your intentions for potentially unused retirement funds can significantly influence the Roth vs. Traditional decision.
Inheritance Efficiency:
– Traditional Accounts: Heirs pay income taxes on inherited amounts when withdrawn
– Roth Accounts: Heirs receive funds tax-free, though they must generally withdraw the money within 10 years (with certain exceptions)
Estate Tax Considerations:
– Paying taxes upfront with Roth contributions effectively removes that tax amount from your estate
– This can be advantageous for those with potential estate tax concerns
Legacy Maximization:
If maximizing the after-tax value of assets passed to heirs is a priority, Roth accounts generally provide advantages:
– No RMDs during your lifetime allows more growth
– Heirs receive the funds tax-free
– The 10-year withdrawal requirement for most non-spouse beneficiaries still allows for significant tax-free growth
For those with substantial legacy goals, Roth accounts often provide superior benefits, especially when the account owner doesn’t need the funds for retirement expenses.
Income in Retirement and Tax Diversification
Having different types of accounts in retirement can provide valuable tax flexibility and help manage your effective tax rate.
Tax Bracket Management:
With both Traditional and Roth accounts in retirement, you can strategically withdraw from either type to manage your taxable income and potentially stay in lower tax brackets. For example:
– Use Traditional account withdrawals up to a certain tax bracket threshold
– Use Roth withdrawals for additional income needs without increasing your tax rate
Social Security Taxation:
Up to 85% of Social Security benefits may be taxable, depending on your “combined income” (adjusted gross income + nontaxable interest + half of Social Security benefits):
– Traditional withdrawals increase this combined income
– Roth withdrawals do not affect Social Security taxation
Medicare Premium Considerations:
Medicare Part B and Part D premiums are income-based (using modified adjusted gross income):
– Traditional withdrawals increase this income measure
– Roth withdrawals do not affect Medicare premiums
Healthcare Subsidies:
For early retirees using ACA health insurance, premium subsidies are based on taxable income:
– Traditional withdrawals increase this income
– Roth withdrawals do not affect subsidy eligibility
Having both account types provides valuable flexibility to optimize your overall tax situation throughout retirement.
Current Financial Needs and Cash Flow
Your immediate financial situation may influence which type of retirement contribution is more practical.
Budget Constraints:
– Traditional contributions reduce your current tax bill, effectively costing less from your current budget
– Roth contributions require more current cash flow since they’re made with after-tax dollars
Example: For someone in the 22% tax bracket, a $6,000 Traditional IRA contribution reduces current taxes by $1,320, effectively “costing” $4,680 in current cash flow. A $6,000 Roth contribution costs the full $6,000 in current cash flow.
Tax Refund Strategy:
Some individuals use Traditional contributions to generate tax refunds, which they then invest in other goals or convert to Roth contributions the following year.
While long-term tax optimization should generally be the primary consideration, current cash flow realities may influence your practical ability to save in different account types.
Strategies for Using Both Account Types
Rather than viewing the Roth vs. Traditional decision as an all-or-nothing choice, many financial experts recommend incorporating both account types into your retirement strategy.
Tax Diversification Benefits
Just as diversifying investments helps manage market risk, diversifying tax treatment helps manage tax policy risk and provides flexibility in retirement.
Hedging Against Tax Uncertainty:
Since future tax rates are impossible to predict with certainty, having both pre-tax and after-tax retirement savings provides a hedge against tax policy changes:
– If tax rates increase substantially, your Roth savings become more valuable
– If tax rates decrease, your Traditional savings become more valuable
Withdrawal Flexibility:
With both account types, you can strategically choose which accounts to draw from based on:
– Your tax situation each year
– Market conditions (potentially preserving Roth accounts during market downturns)
– Required Minimum Distributions
– Healthcare needs and costs
– Other income sources
Example Scenario:
A retiree with both account types might:
– Take Traditional withdrawals up to the top of the 12% tax bracket
– Use Roth withdrawals for additional income needs to avoid moving into the 22% bracket
– Adjust this strategy annually based on other income, deductions, and changing tax laws
This flexibility can significantly enhance tax efficiency throughout retirement.
Splitting Contributions Between Account Types
Many retirement savers benefit from contributing to both Roth and Traditional accounts, either simultaneously or at different life stages.
Percentage-Based Splitting:
Some individuals allocate their retirement contributions by percentage:
– 50% to Traditional accounts for immediate tax benefits
– 50% to Roth accounts for tax-free growth and withdrawal flexibility
Income-Based Splitting:
Others base their allocation on income thresholds:
– Traditional contributions to reduce income to a specific tax bracket
– Roth contributions for additional retirement savings
Life Stage Approach:
Many financial advisors recommend adjusting your Roth/Traditional mix throughout your career:
– Early career: Emphasize Roth contributions when in lower tax brackets
– Peak earning years: Shift toward Traditional contributions when in higher tax brackets
– Pre-retirement years: Potentially return to Roth contributions if in lower brackets
Employer Plan and IRA Combination:
Some use different account types for different savings vehicles:
– Traditional 401(k) for employer matching and higher contribution limits
– Roth IRA for additional savings with greater withdrawal flexibility
These approaches provide both immediate tax benefits and long-term tax-free growth potential.
Roth Conversion Strategies
Converting Traditional retirement funds to Roth accounts can be a powerful strategy for building tax diversification, especially during lower-income years.
Opportunistic Conversion:
Consider Roth conversions during years when your income is temporarily lower:
– Periods between jobs
– Early retirement before Social Security and RMDs begin
– Years with significant tax deductions
– Years with business losses
Bracket-Filling Strategy:
Convert just enough to “fill up” a lower tax bracket without pushing into a higher one:
– Calculate the amount that would bring your taxable income to the top of your current bracket
– Convert that amount from Traditional to Roth accounts
– Pay the resulting taxes from non-retirement funds (ideally)
Multi-Year Conversion Plan:
For those with substantial Traditional balances, a systematic conversion strategy over several years can minimize the tax impact:
– Convert portions annually to spread out the tax liability
– Target completion before RMDs begin at age 73
– Potentially accelerate during years with favorable tax legislation
Conversion Considerations:
– Taxes on conversions are due in the year of conversion
– Ideally, pay conversion taxes from non-retirement funds to maximize the amount converted
– Consider the impact on other income-based items (Medicare premiums, Social Security taxation, etc.)
– Once completed, conversions cannot be undone (the “recharacterization” option was eliminated in 2018)
Roth conversions require careful planning but can significantly enhance retirement tax efficiency when executed strategically.
Employer Plan Considerations
If your employer offers both Traditional and Roth options in your 401(k) or similar plan, several specific considerations apply.
Employer Matching:
– Employer matching contributions are always made on a pre-tax basis, even if your contributions are Roth
– This automatically creates some tax diversification even if you choose all Roth contributions
Higher Contribution Limits:
– 401(k) plans have much higher contribution limits than IRAs ($22,500 vs. $6,500 in 2023)
– This allows for more significant tax diversification within a single plan
No Income Limitations:
– Roth 401(k) contributions have no income limitations, unlike Roth IRAs
– This makes them valuable for high-income earners who want Roth benefits
In-Plan Roth Conversions:
– Many plans allow for in-plan Roth conversions of Traditional 401(k) balances
– This provides another avenue for building Roth savings
After-Tax Contributions and Mega Backdoor Roth:
– Some plans allow additional after-tax (non-Roth) contributions beyond the standard limits
– These can often be converted to Roth funds through in-plan conversions or rollovers
– This “mega backdoor Roth” strategy can allow for significant additional Roth savings
Employer plans often provide unique opportunities for implementing a mixed Roth/Traditional strategy, especially for higher-income individuals.
Implementing Your Decision: Practical Steps
Once you’ve evaluated the relevant factors and determined your preferred approach, several practical steps will help you implement your Roth vs. Traditional strategy effectively.
Opening the Right Accounts
Depending on your situation, you may need to establish new accounts or modify your existing retirement savings approach.
For IRAs:
1. Research providers: Compare fees, investment options, customer service, and account features
2. Complete application: Provide personal information, beneficiary designations, and funding instructions
3. Fund the account: Make contributions via transfer from your bank account, or potentially via direct deposit from your paycheck
4. Select investments: Choose appropriate investments based on your time horizon and risk tolerance
For Employer Plans:
1. Review plan documents: Understand available options, including Traditional and Roth contribution types
2. Complete enrollment or changes: Update your contribution elections through your employer’s HR system or benefits portal
3. Specify contribution percentages: Determine how much to contribute to each account type
4. Select investments: Choose from available investment options within the plan
For Both:
– Ensure you’ve designated beneficiaries for all retirement accounts
– Set up automatic contributions to maintain consistent savings
– Review account statements regularly to monitor progress
Maximizing Contributions and Catch-Up Provisions
To optimize your retirement savings, aim to contribute as much as possible within applicable limits.
Contribution Prioritization:
1. Employer match: At minimum, contribute enough to capture any employer matching funds
2. HSA contributions: If eligible, consider Health Savings Account contributions for triple tax advantages
3. IRA or additional employer plan contributions: Based on your Roth/Traditional strategy
4. After-tax savings: Once tax-advantaged options are maximized
Catch-Up Contributions:
If you’re age 50 or older, take advantage of catch-up contribution provisions:
– Additional $1,000 annually to IRAs (both Roth and Traditional)
– Additional $7,500 annually to 401(k), 403(b), and 457 plans
– These catch-up amounts are in addition to standard contribution limits
Spousal Contributions:
If you’re married and one spouse has little or no earned income:
– The working spouse can make IRA contributions for both individuals
– This effectively doubles your IRA contribution capacity
– The same Roth vs. Traditional considerations apply to spousal contributions
Navigating Income Limitations and Backdoor Strategies
Higher-income individuals may need special strategies to access Roth benefits.
Roth IRA Income Limits Workaround:
If your income exceeds Roth IRA contribution limits, consider:
1. Backdoor Roth IRA:
– Make a non-deductible contribution to a Traditional IRA
– Convert the Traditional IRA to a Roth IRA
– If you have no other pre-tax IRA balances, the conversion is largely tax-free (except on any earnings between contribution and conversion)
2. Pro-Rata Rule Considerations:
– If you have existing pre-tax IRA balances, the pro-rata rule applies to conversions
– The taxable portion of any conversion is calculated based on the ratio of pre-tax to after-tax money across all your IRAs
– Consider rolling pre-tax IRA funds into an employer plan (if allowed) before implementing backdoor Roth strategies
3. Mega Backdoor Roth:
– If your employer plan allows after-tax (non-Roth) contributions beyond the standard limits
– Make after-tax contributions up to the overall limit ($66,000 in 2023, including employer contributions)
– Convert these after-tax contributions to Roth via in-plan conversion or rollover to a Roth IRA
Traditional IRA Deduction Limits:
If you’re covered by a workplace retirement plan and your income exceeds certain thresholds:
– Your ability to deduct Traditional IRA contributions may be limited or eliminated
– Consider non-deductible Traditional IRA contributions (potentially followed by Roth conversion)
– Or focus on maximizing workplace plan contributions instead
Monitoring and Adjusting Your Strategy Over Time
Your optimal Roth vs. Traditional mix will likely change throughout your life as your circumstances evolve.
Regular Review Triggers:
Reassess your strategy when you experience:
– Significant income changes (raises, job changes, etc.)
– Major life events (marriage, children, home purchase)
– Tax law changes
– Approaching retirement
– Changes in retirement goals or timeline
Annual Tax Planning:
Each year during tax planning, consider:
– Whether your current tax bracket suggests adjusting your Roth/Traditional balance
– Opportunities for Roth conversions in lower-income years
– Changes to contribution limits or income thresholds
Retirement Transition Planning:
As you approach retirement:
– Develop a specific withdrawal strategy that optimizes your account types
– Consider strategic Roth conversions during the window between retirement and RMDs
– Coordinate your strategy with Social Security claiming decisions
Ongoing Education:
Stay informed about:
– Changes to retirement account rules and tax laws
– New strategies for optimizing retirement savings
– Evolving best practices for retirement income planning
By implementing a thoughtful strategy and adjusting it as needed throughout your life, you can maximize the benefits of both Roth and Traditional retirement accounts.
Conclusion: Making Your Best Choice
The decision between Roth and Traditional retirement accounts is highly personal, with no one-size-fits-all answer. By understanding the fundamental differences, carefully considering the key decision factors, and potentially incorporating both account types into your strategy, you can make choices that align with your specific financial situation and long-term goals.
Summarizing Key Considerations
As you finalize your approach, keep these essential points in mind:
Tax Rate Comparison:
– Traditional accounts benefit those who expect lower tax rates in retirement
– Roth accounts benefit those who expect higher tax rates in retirement
– Tax diversification helps hedge against tax rate uncertainty
Time Horizon:
– Longer investment timeframes generally increase the advantage of tax-free growth in Roth accounts
– Shorter timeframes may emphasize the immediate tax benefits of Traditional accounts
Flexibility Needs:
– Roth IRAs offer greater access to contributions before retirement
– Traditional accounts may provide more current tax reduction
– Having both provides maximum flexibility
Legacy Planning:
– Roth accounts generally provide more efficient wealth transfer to heirs
– No RMDs (for Roth IRAs) allows continued growth throughout your lifetime
Current Financial Situation:
– Traditional contributions reduce current taxable income
– Roth contributions require more current cash flow but provide tax-free growth
The Value of Professional Guidance
Given the complexity and long-term implications of the Roth vs. Traditional decision, consider consulting with financial professionals:
Tax Professionals:
– Can provide detailed analysis of your current tax situation
– Help project potential future tax scenarios
– Advise on tax-efficient contribution and withdrawal strategies
Financial Advisors:
– Offer holistic retirement planning that incorporates Roth/Traditional decisions
– Help balance retirement savings with other financial goals
– Provide ongoing guidance as your situation changes
Retirement Specialists:
– Assist with employer plan options and strategies
– Help navigate complex rules and limitations
– Provide guidance on rollovers and account consolidation
While professional guidance involves cost, the potential long-term tax savings from optimized retirement account strategies often far exceeds these expenses.
Taking Action: Your Next Steps
Regardless of where you are in your retirement planning journey, consider these action steps:
1. Assess your current situation: Review your existing retirement accounts, tax bracket, and overall financial picture
2. Clarify your retirement goals: Define your timeline, income needs, and legacy objectives
3. Evaluate tax projections: Consider both current and potential future tax scenarios
4. Develop a contribution strategy: Decide how to allocate new contributions between account types
5. Consider conversion opportunities: Evaluate whether Roth conversions make sense in your situation
6. Implement your plan: Open necessary accounts and set up contribution arrangements
7. Schedule regular reviews: Plan to reassess your strategy annually and after significant life changes
Remember that some retirement savings—in either account type—is far better than none. Don’t let the complexity of this decision prevent you from taking action toward securing your financial future.
By thoughtfully considering the Roth vs. Traditional decision within the context of your overall financial plan, you can make choices that maximize your after-tax retirement income and help you achieve your long-term financial goals.
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This article is part of our Investing series. For more guidance on building wealth, check out these related articles:
– Investing for Beginners: Building Wealth Over Time
– Understanding Different Investment Types
– Retirement Planning Basics: Securing Your Future