A reader has just written in urging me to take another look at Roth IRAs. This follows my previous column, in which I said I was wary of them, partly because I figured I’ll be paying a lower tax rate in retirement than I am while I’m working.
“The tax rate is not the issue; it’s the amount of tax you will be paying,” he reminds me. And he argues that many people will end up paying less in total tax over their lifetime if they use an after-tax Roth IRA instead of a pretax traditional one.
I’m coming back to this topic because he raises a very good issue — and because Congress is considering slamming the Roth IRA door closed for good for upper-middle-class earners. So we might only have a few months to make this big financial decision, which could have an outsized effect on how much money we have in retirement.
Brett Arends | MarketWatch