Comments on: Tax Diversification: Roth IRA vs. Traditional IRA http://www.obliviousinvestor.com/tax-diversification-roth-ira-vs-traditional-ira/ Index Investing: The Oblivious Investor Fri, 12 Mar 2010 19:19:14 -0600 http://wordpress.org/?v=2.9.2 hourly 1 By: Investor Junkie http://www.obliviousinvestor.com/tax-diversification-roth-ira-vs-traditional-ira/comment-page-1/#comment-4185 Investor Junkie Thu, 10 Dec 2009 00:54:08 +0000 http://www.obliviousinvestor.com/?p=5309#comment-4185 One issue that was not mentioned, political risk. Will our government change the rules on us mid-stream? This is one risk with going with a Roth IRA, you assume the government will keep it not taxable. If not directly, it's possible indirectly. This was just discussed in the comments section of the WSJ: http://online.wsj.com/article/SB126004888014078557.html#articleTabs%3Dcomments One issue that was not mentioned, political risk. Will our government change the rules on us mid-stream? This is one risk with going with a Roth IRA, you assume the government will keep it not taxable. If not directly, it’s possible indirectly.

This was just discussed in the comments section of the WSJ:

http://online.wsj.com/article/SB126004888014078557.html#articleTabs%3Dcomments

]]> By: Hank http://www.obliviousinvestor.com/tax-diversification-roth-ira-vs-traditional-ira/comment-page-1/#comment-4127 Hank Sun, 29 Nov 2009 17:24:02 +0000 http://www.obliviousinvestor.com/?p=5309#comment-4127 The key to the Roth decision is not if you think your tax bracket will be higher. The important thing is if you "know" your tax bracket will be higher. For over 95% of savers, paying the taxes up front rather than deferring them compounds the risk that they will have insufficient retirement income. Only after that risk has been eliminated should one consider a Roth. The key to the Roth decision is not if you think your tax bracket will be higher. The important thing is if you “know” your tax bracket will be higher. For over 95% of savers, paying the taxes up front rather than deferring them compounds the risk that they will have insufficient retirement income. Only after that risk has been eliminated should one consider a Roth.

]]> By: Mike http://www.obliviousinvestor.com/tax-diversification-roth-ira-vs-traditional-ira/comment-page-1/#comment-4059 Mike Tue, 17 Nov 2009 15:09:21 +0000 http://www.obliviousinvestor.com/?p=5309#comment-4059 EoW: To me, if you have a Roth option in your 401k, it just goes in step #3. When going back to max out the 401k, put some of it in Roth, some of it in traditional. (Of course, this is just a rough guideline. If a person has a reasonable degree of certainty that their tax bracket will be higher/lower in retirement, then it may make sense to do all Roth or no Roth in the 401k.) As to life insurance, I have yet to see an insurance product that I'd recommend over simply using ETFs in a taxable account for most investors, though a) I suppose that could change, and b) that doesn't apply to every single situation. EoW:

To me, if you have a Roth option in your 401k, it just goes in step #3. When going back to max out the 401k, put some of it in Roth, some of it in traditional. (Of course, this is just a rough guideline. If a person has a reasonable degree of certainty that their tax bracket will be higher/lower in retirement, then it may make sense to do all Roth or no Roth in the 401k.)

As to life insurance, I have yet to see an insurance product that I’d recommend over simply using ETFs in a taxable account for most investors, though a) I suppose that could change, and b) that doesn’t apply to every single situation.

]]> By: Rick Francis http://www.obliviousinvestor.com/tax-diversification-roth-ira-vs-traditional-ira/comment-page-1/#comment-4058 Rick Francis Tue, 17 Nov 2009 14:24:00 +0000 http://www.obliviousinvestor.com/?p=5309#comment-4058 Another advantage of having some money in a Roth IRA is no minimum required distributions. You could choose to leave those tax free investments to your children. -Rick Francis Another advantage of having some money in a Roth IRA is no minimum required distributions. You could choose to leave those tax free investments to your children.

-Rick Francis

]]> By: Evolution Of Wealth http://www.obliviousinvestor.com/tax-diversification-roth-ira-vs-traditional-ira/comment-page-1/#comment-4057 Evolution Of Wealth Tue, 17 Nov 2009 14:19:31 +0000 http://www.obliviousinvestor.com/?p=5309#comment-4057 Any thoughts on how to mix in the Roth 401k? What do you think #4 being life insurance instead of the taxable account? Any thoughts on how to mix in the Roth 401k?
What do you think #4 being life insurance instead of the taxable account?

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