Stewart Welch joined us with a look at what's best: Roth or Traditional IRA? He is often asked which is the smarter investment, a Traditional IRA or a ROTH IRA? As with so many things, the answer is, "It depends". In making your decision, let's look at several key differences in the two retirement plans:
Recommendation Guidelines. Assuming you are eligible to contribute to either a deductible Traditional IRA or a Roth IRA, how do you decide which is best? Stewart's rule of thumb is that if you are currently in the 25 percent or lower tax bracket, go with the Roth IRA. If you are in the 33% or higher tax brackets, use the Traditional IRA so that you benefit from an immediate tax deduction. The 28 percent tax bracket is the 'swing' bracket where you could go either way.
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