should i open roth or trad. IRA?

[wedi42]

i'm going to open a ira tomorrow with $4000.
if i open a trad. ira i get to deduct the contribution, but i pay taxes when i retire
with a roth i get no benefit today, however when i retire the money is tax free.

the roth makes more sense right?

 

[axelfox]

roth baby.

 

[keeleysam]

Traditional and convert in 2007.

 

[ElFenix]

what is your marginal rate now vs your marginal rate in the future?

 

[mugs]

Originally posted by: keeleysam
Traditional and convert in 2007.

What's the advantage of that? I've seen it suggested before and I've always wondered...

 

[wedi42]

Originally posted by: ElFenix
what is your marginal rate now vs your marginal rate in the future?

15% now, and i can't predict the future.

 

[Engineer]

How old are you? The longer you have until you retire, the more the Roth is favored (huge growth over a long period and no taxes to pay). Of course, lots of factors to consider including expected tax rate when you retire (difficult to predict).

I would say go with Roth unless you're in the 35% tax bracket! 😀

 

[Oscar1613]

also with roth you can withdraw your contributions (but not earnings) penalty free at any time if something should happen where you should need it. traditional, there is some penalty for withdrawing anything before it matures

 

[thomsbrain]

i'm sure having both would be best if you can save that much.

 

[vi edit]

Originally posted by: thomsbrain
i'm sure having both would be best if you can save that much.

$4000 only combined. All in one. All in the other. Or a little in both. But you can't go past the 4k limit.