I know Roths are all the rage since they were introduced, but I'm not necessarily seeing how or why they are the way to go. As most of you probably know (but FYI for those who don't), the difference is that with a Roth IRA, you're taxed on that money now and won't get taxed when you draw money from it in retirement; with a Traditional IRA, it's the opposite.
My question is: at what rates? How is that determined? If I'm taxed now on a Roth, is that rate based on my TOTAL income (i.e. not just the Roth money but my current salary/etc)? Similarly, with a Traditional, am I taxed only on the money I pull out (assuming that is my only "income" other than whatever money my retirement portfolio makes)? Assuming all of that is true, it seems more likely to me that the Traditional is better as I am very most likely to be pulling/making less money from my IRA in retirement than the money I'm making now, as is the likely case for most I'd think. So where's the Roth appeal?