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Rethinking Retirement Accounts: Why a Roth IRA Might Not Always Be Best
Bite the tax bullet when your tax liability is likely to be at its lowest. Just don't forget to invest as much of any tax savings as you can when you can.
The premise seems compelling enough. Forego a tax break that may or may not do you much good right now in exchange for tax-free withdrawals in the future -- when your tax rates might be higher. Although nobody knows for sure what the future holds, that's the higher-odds/lower-risk bet most people are making.
Except, Roth retirement accounts' tax-free distributions in retirement aren't necessarily always the right fit. It's possible you'd still be better served by making tax-deductible contributions to an IRA now and paying whatever taxes come due then.
Here's a closer look at when and why the non-Roth option might make more sense for you.
