to Roth or not to Roth?

[the doctor]

that is the question? what say ye investment guys?

several years ago we took my wife out of her 401K because there was no company match and we felt the Roth IRA a terrific supplement to already established IRAs and the 401K at my job (we max out). Now with tax rates and what will likely be hikes in the balance of our inept government I am feeling my strategy is going to shift to tax avoidance. I cant afford to both...yet.

I have already maxed out my retirement plan, both healthcare spending accounts and our dependent care accounts. ANy way I can shelter income within the law from them I am going to do it...they cant give me budget so I cant see giving them anymore of tax dollars than I absolutelyhave to.

Do the true pros and cons of roth vs traditional/401K lie in your strategy or is there something else I am missing roth vs traditional?

the doc

[dukhntn]

Check with your company. Some 401k plans allow you to split up your contribution into a ROTH 401k and a traditional 401K. I'm relatively young (32) and tax rates now are as low as they have been in a long time. I'd rather pay the lower tax rate now (of course none of us can see into the future but the way things are going I doubt anyone is going to lower our taxes). Personally I don't see them going anywhere but up so I've got the majority of my contributions going toward the ROTH 401k. Of course I've got enough other deductions to make sure all is well with my current tax situation so I am not dependent on my 401k contributions to lower my tax liability. All this to say I don't know your situation and you'll probably get answers as divided as the Benelli vs. Beretta threads on here.

[@work]

My B-I-L had a pretty good analogy of this...would you rather pay taxes on the seed or on the crop? I'm sure that there's a little more to it than this however.

[the doctor]

Pretty good analogy...limits for Roth are going up next year if I'm not mistaken. May be better off paying it all now and being done with the gubment related to that money.

The doc.

[Ster]

[blgros1]

[Deltaquack]

Also, keep in mind that you are in essence putting more in if it's tax free. I currently do both. You can max out more that way. If you can't......i'd go with tax free way right now, b/c like said above, you'll be in a lower tax bracket most likely when you are drawing it out. If not, it won't matter anyway, b/c the only way that'll happen is if you have a ton in there when it's mandatory that you start withdrawing it. You'll be happy either way then.

[the doctor]

What happens if you tax defer all ur life and then move out of country to retire? Still got to file us return?

The doc

[bulldog ducker]

Taxes... You pay em now or you pay em later. That tax free money you are putting back will get taxed at some point. Do you think the tax rate will be better or worse than it is now. I think taxes currently are lower than they will be in the future.

In other word Uncle Sam gunna get his...

[Deltaquack]

[the doctor]

What about retiring to another country...seriously embracing the fact that the us may not be where I want live work or retire...this could be sooner than later if our nation keeps heading the direction it seems to be going.

The doc

[dukhntn]

[dukhntn]

Here is a little bit of info on that:

http://www.taxmeless.com/USCitizenRenounce.htm

[bulldog ducker]

[the doctor]

Figured as much...viewed by Irs as distributed on the day of expatriation

Death and taxes...they got us.

The doc