Donât click that mouse.
Before you plunge your $6,000 annual limit into a âRothâ individual retirement account for 2020, stop for a second and look at some fresh data out of Boston College.
New research from the BC Center for Retirement Research finds that most of us donât pay much in income tax once weâre retired. For at least 80% of the population the amounts are peanuts.
And that suggests that for most of us the âtraditionalâ IRA is probably going to work out a better deal than the Roth option.
The IRS lets each of us save up to $6,000 a year in a tax-sheltered individual retirement account (there are, as always with the IRS, some mind-numbing little complications and caveats). If I choose a traditional IRA, I get a tax saving right away: For federal and state purposes, my taxable income this year is reduced by the amount of my contribution. Alas, when I withdraw the money in my golden years, it will count as taxable income, and Iâll