Timeline for For an independent contractor, which is better: a traditional IRA or a Roth IRA?
Current License: CC BY-SA 3.0
8 events
| when toggle format | what | by | license | comment | |
|---|---|---|---|---|---|
| Jul 9, 2012 at 11:25 | vote | accept | sbuck | ||
| Apr 8, 2012 at 18:37 | comment | added | JTP - Apologise to Monica♦ | By definition, the dollars put into Roth are instead. Even if it's $100, it's instead. I refer you to an article I wrote, and recently updated with 2012 numbers. dontmesswithtaxes.typepad.com/dont_mess_with_taxes/2012/01/… I maintain my assertion that the number of people who save their way to a higher bracket in retirement is the exception, not the rule. There are times to use Roth, but not at every stage of one's life. (we still have no details from the OP, BTW) | |
| Apr 8, 2012 at 14:32 | comment | added | kdgregory | @Joe - for the record, I said "as well", not "instead". That said, I think there are very few cases where tax-deferred growth wins over tax-free growth. The only one that I could come up with is riches-to-rags with a very short time horizon. If you've done the NPV analysis to show that there are more cases, I'd be interested in seeing it. | |
| Apr 7, 2012 at 20:08 | comment | added | JTP - Apologise to Monica♦ | @kdgregory - without knowing a few bits of information, among them, susan's current marginal rate, age, general level of savings so far, she may be better off going pre-tax as much as she can. Why do you suggest Roth instead? | |
| Apr 7, 2012 at 12:48 | comment | added | kdgregory | That said, there's no reason not to put after-tax money in a Roth as well. | |
| Apr 7, 2012 at 12:47 | comment | added | kdgregory | +1 for the 401k recommendation. If Susan is truly an independent contractor (versus an employee of a consulting firm), then the "safe harbor" rules allow for some remarkable bookkeeping. | |
| Apr 7, 2012 at 5:02 | comment | added | JTP - Apologise to Monica♦ | And the Solo 401(k) is also available as a Roth. Fewer brokers offer, but they're still out there. | |
| Apr 6, 2012 at 23:14 | history | answered | littleadv | CC BY-SA 3.0 |