I purposefully put this on the Travel side of my blog as I know I have a lot of readers in the Millennial Generation who are jumping on travel deals and rebates, well tomorrow is the last day for your 2013 Traditional IRA contribution, and it can pay you up to 25% back in rebate depending on your tax bracket. You have two options: Roth or Traditional. The Roth will not give you a rebate, but the money will grow tax free, the Traditional will give you a rebate but will be taxed when you withdraw.
1. You don’t have enough money?
You don’t need to put in the full $5,500, why not just put in $500 today, you will get $125 in tax rebate from that at the 25% bracket.
2. You have filed your 2013 taxes already?
You can still contribute to 2013 retirement accounts, if you do a Roth then it is after tax, so doesn’t matter, you don’t report it on the return. If you do a Traditional you can request to alter your 2013 tax return with the new rebate added. I would only adjust my filed return if I was doing a decent sized contribution to the traditional.
3. You don’t know whether to do a Roth or a Traditional?
If you haven’t filed do a Traditional. If you have filed, do a Roth- Just do it. Capture the tax savings now, set aside some money for retirement in the future, and figure it out later. It may not be the absolutely perfect decision for everyone, but not doing it due to uncertainty is far worse. If you want to get into some of the math behind which is best, read this post. <income restrictions are here too>
4. You don’t know how to do it?
You can set up an account with any of the big firms, such as Fidelity, Vanguard, TD Ameritrade. It takes minutes online. Here is how I set one up with Vanguard read this post
5. You don’t know how to invest and what funds to pick?
It doesn’t matter! First thing, if you don’t contribute you lose up to $1,375 in tax rebates, secure that first, then worry about the allocations. Then read my post on which funds are best for your Vanguard Roth IRA
6. Saverocity posts are too long and I still don’t understand what the hell to do?
If you are procrastinating about funding an IRA. Ask any question in the comments below, from the most simple to the most advanced, i’ll answer it and you can make an informed decision to take control of your finances.
Aren’t there income restrictions that phase out the tax savings? If known, could you post?
Yep, please click on the link for Point 3 and you will see the income requirements at the top of that post.
Thanks! Alas, exceed income limits, as I feared….. good problem to have though….
Glad to hear it!
I think this is far from amazing. This is NOT free money, you are just delaying tax payment until you withdraw.
Additional counter arguments:
– You are assuming that you effective tax rate will be lower when you retire (not a sure thing).
– You are restricting what you can invest in (Has to be a qualified plan)
– These funds are not liquid in case of an emergency.
Don’t get me wrong if you are swimming in money this is a no-brainer for diversification. However if you have other choices to make, an IRA would not be my first choice.
I disagree. You will only ever be swimming in money if you put tax advantaged savings ahead of discretionary spending.
If you aren’t in the place to do this it’s likely due to debt, which requires intervention too.
Most people, have debt and I would argue that debt should be paid off before giving money to brokers to gamble your money in questionable investments.
My priorities ahead of making IRA contributions:
– Save up liquid funds for 1 year’s worth of living expenses
– Pay off mortgage (that’s also tax advantaged by the way)
– Spend or save some money for travel so that you will not have any regret when you are 65 and can’t walk up to Machu Picchu Montain because you need a hip or knee replacement. Your funds will not be nearly as valuable if you are not in good health.
I would think that the majority of US population still has debt and not sufficient savings. I also know that I am in the minority with my views.
I respect you and your views and have asked the same questions, if you read my last two posts I share the story of my life, where I too decided to climb Machu Picchu, and many other mountains today.
I’ve also explored many of the liquidity questions and I think that deferring tax and other tax advantaged savings are the secret to long term riches.
Please read the link on point 3 if you have the time, I’d be keen to hear your thoughts on my analysis.
I think you make some excellent points on that article and based on my quick read (I did NOT check your math) seems to be correct. I agree that tax deferred and tax advantaged savings are very important to gain financial independence. However, there are some key points I wanted to make to put things in perspective.
– You assumed 8% rate of returns (I assume it was NOT adjusted for inflation )
This is far from guaranteed return and assuming you are investing in large cap stocks it would really depend on the underlying economy. I tend to think investing in the stock market is a zero sum game + the underlying growth of the economy. Of course you can pick a specific segment or vertical market and perform much better but at that point you are taking a bit more risk a.k.a educated gambling.
I think contributing to take advantage of a company 401K match is a no brainer. Unfortunately since the great recession some (including my) company no longer provides that.
After that I would only contribute to an IRA if I had a investment goal that I would feel really comfortable about.
I actually used Roth IRA to replenish my emergency funds since you can take your original contributions tax free, but then I realized that emergency funds need to be secured and there are very few low-risk investment choices that can compete in terms of returns with other non tax-advantaged choices.
I will leave you with another quick math of my own. Let’s say that you have a mortgage with a 4% interest rate. Assuming you have an effective tax rate of 25%, if you pre-pay your mortgage you yearly rate of return will be ~3% guaranteed (Tax-advantaged because the house value appreciation will not be taxed).
This is opposed to an uncertain 8% that you do not have full control over. Don’t get me wrong, I am all for investing in the stock market, but for the little guys, I would just say try to pay off your debt including your mortgage first. Once your house is paid off, then you can make more risky investment choices.
Wow, that was my longest blog comment ever!
I’m glad you left that comment!
Firstly, I own free and clear. And while you are correct that a guaranteed rate of return from the mortgage payment is a great thing, when you factor in the tax rules we have you’d do a lot better over time to create a well diversified retirement account.
I like your thinking on the Roth, many miss that nuance of liquidity within the vehicle, and go off half cocked, sinking emergency funds into the market.
My numbers are not inflation adjusted, however that is not a one sided argument, I took it from a pure growth perspective and did not skew some data by applying inflation to some and not others. The reality is that you will need to save more than a one off $17.5k payment to retire, as the $260-$330k it grows to won’t suffice for your retirement that’s the only place inflation has in relation to that post.
Yes, the market fluctuates, I agree. But over time standard deviation has a lowered impact, an all stock portfolio should generate 10% and I actually reduced it to 8% to build in a more conservative model.
Now, should you seek to pay off your debt first more power to you. I think you will be in great shape if you can do that. For what it’s worth my current place is in contract and buying all cash again is the last thing I want to do, I would rather rent or get a mortgage… So we all have our own approach to things.
I have a future post brewing in my mind regarding how to pay off your mortgage sooner, I hope it might give you some ideas.
At the end of the day, I want all of us to be happy in retirement however we get there, and I feel if this post got one person to fund an IRA who wouldn’t otherwise had done so, especially a person without debt, it was worth it.
Great post – worth the time to read despite the fact that I should be up to my elbows in Passover prep. Again I will forward to my own millennials. Very smart to do a short and snappy post aimed at them. Those who can do it should most definitely do it. I did mine last night to reap significant savings based on our accountant’s projections. But one doesn’t need an accountant – if you have the cash, do it! In fact I think Matt did a post showing how it can even make sense in some cases to borrow to do it!!
I thought by the time anyone got around to reading my essays the deadline would have passed!
For Point 2, I would only adjust my filed return if I was doing a decent sized contribution to the traditional, what would you consider sizeable amount to adjust the filed return?
The full $5500 is an easy answer, after which a sliding scale of hassle plus risk of audit vs savings… For me maybe I would pull $3k as an arbitrary answer out of my hat.
Literally laughed out loud at #6.
I am confused a little on why you advise to go traditional on point 3 particularly if maxing out is on the table, why on earth would someone be better off putting in $5500 pre tax when they can put in $5500 post tax? Yes I saw your link to a post that compares putting $17.5K into a 401K vs $5.5 into a Roth + 12 taxable but that is not the case here. Depending on your tax rate, you are leaving 15,25,28 etc…. percent of the possible maximum to defer on the table if you max out at tax deferred of $5,500 vs Roth at $5,500. I just don’t get it. In what scenario with common returns between respective investments would that actually be the right decision if putting in max? Unless we are in a parallel universe of some future negative tax rate then I don’t see it.
As for the argument of traditional over roth, I am a little confused on the “have got to inflate the value of it by the power of compound interest, so it is a much better deal.” It is only a ‘better deal’ if you can manage to reduce the tax rate of withdrawals below what you pay now. If tax rates are neutral, and returns are neutral – the math of contributing income to one of these (with Roth being 1-T) is exactly the same. The ‘buffer’ you mention in the previous example, if we are comparing apple to apple investments represents the marginal tax rate at time of contribution and nothing more. That is the price of your ‘ownership of tax basis’. Your analysis in the other post muddies the water as it does not compare Tax Deferred to Roth, but instead tax deferred to 1/3rd roth + 2/3ish taxable. Well ofcourse the 100% tax advantaged wins. But if we are talking apples to apples and comparing an investment in a traditional IRA (or 401k in the same amount) to that of a Roth, I find it hard pressed to suggest that some young family currently in, lets say, the 15% marginal bracket would be better off not locking in that effective rate in hopes that they can find a way to beat that in the future – particularly one where we have 50+ trillion in unfunded liabilities (and thus the hope for future spending reductions is borderline folly unless we are expecting dramatic social entitlement curtailment).
I’ll try to address your points:
1. Why a Traditional and what about that family in the 15% bracket? I suggest a traditional IRA for the following reasons:
You have to pick one by tomorrow, and people will procrastinate as to which they select. A Traditional IRA can be converted to a Roth IRA as soon as this year, so they lock in the savings, and if they then realize it would be more optimal to be in a Roth they can swap for no penalty. That is not the same for the Roth. It is the safer option as it has more possibilities for change.
Too much uncertainty and too many variables create indecision, the Traditional is the option that locks you in, but provides the most ‘outs’.
2. Why would they be better off, my last post is not the case here.
Not true, it is exactly the same here. If you put $5500 into a Traditional the Govt will kick you back a refund, that refund is yours to invest for many years, in the case of the young family we are talking 40-50 years of investing.
More importantly, if it loses money, you have less to no tax liability, if it gains money, you pay taxes…. it is a win/win there. If rates increase, it doesn’t necessarily mean that you lose out, because the term of investing appreciation offsets the future tax rise. Furthermore, the tax rate is not certain to rise. We do not know, but we do know that if the money appreciates, and the tax rates rise, we don’t necessarily lose out here, because we are in the market with what otherwise would be the governments money.
So, in answer to your confusion:
I felt it better to recommend the better of two choices in order to help make a decision, since indecision would be worse than both. Further to which, the option I recommend is better than the other one as it offers the ability to backtrack and change, hence not only deferring taxation, but the decision making process itself.
Show me one mathematical scenario (investment return and tax rate neutral) where comparing putting $5500 into a traditional vs $5500 into a Roth results in the traditional IRA having a better return. Hint: Unless you are talking about a net loss position, it is mathematically impossible even if you be utopian and presume the taxpayer takes the (IRA*T) refund and invests it all in taxable accounts. If one maxes out the $5500, and does not do Roth, they are leaving tax deferral benefit on the table. The math on that is absolute. If you are not maxing out, then we can play the speculate tax rate game.
Further, the casual discussion of converting Traditional IRA to Roths is fine if this is the only IRA in play. But if there are historical IRAs, the bookkeeping can be a pain in the arse (you don’t get to cherry pick your IRAs to convert in the IRS’ eyes) and if you happen to have some previous deductible IRAs with non deductible IRAs then you have a very different mathematical answer and basis challenge. This is not a flippant consideration for a lot of people.
I’ll answer your question simply, Traditional IRA means your Net Present Value is increased by current tax rate, which when inflated by investment and compound interest grants an interest free loan on your initial investment, leveraging your position.
Now, over to you – if you were me, what would you have posted today differently, and how would it have been better, considering the time constraints in place?
“I’ll answer your question simply, Traditional IRA means your Net Present Value is increased by current tax rate, which when inflated by investment and compound interest grants an interest free loan on your initial investment, leveraging your position.”
? In talking about a leveraged position – you are saying putting $5500 that will be taxed in the future is somehow more leveraged than $5500 that will not be taxed? Somehow the NPV of a pretax $5500 is more than that of a post tax $5500?!? I am truly at a loss on this one. I have a deal for you – you give me $5500 post tax to invest and keep and I will give you $5500 pretax to ‘leverage and invest’. You can have the ‘leverage’, I would much rather maximize the amount I can put away. Your logic stream would make more sense in the limit for Roth was lower (and thus the total NPV to the investor after tax may very well be equal or close to it). But it is not. You are paying a monstrous premium in terms of lost opportunity (I.e. less total tax effected dollars invested) to have this ‘interest free loan’. To me and basic mathematics, the ability to contribute more (effectively by a factor of your marginal tax rate) trumps all quite easily.
As for what I would have said in the post – “If you are in a fortunate position to be able to max out the IRA contribution of $5,500, and truly want to save as much as possible in tax preferred retirement savings, you should contribute to a Roth as that will allow you to defer $5,500 after tax dollars, which is equivalent to $6,470/$6,667/$6,945 in pretax income (depending on your marginal tax bracket).” Then if deem needed: ” In other words, since Roth contributions are after tax, yet you can still put in as much as pre-tax traditional, this will allow you to extend the amount you are putting towards your retirement in comparison to the traditional IRA.”
I applaud you asking people to invest into IRAs, but telling them $5500 pretax is better mathematically then $5500 Roth (even taking into account taxable earnings on ‘refund’) is just plain false and if they follow that they are foregoing the opportunity to max out the effective deferral. Then making it sound like flips from traditional to Roth can be casually done anytime without risk can get some people into some very screwy situations and is the exact opposite of a keep it simple approach. Simply put, if people have the possibility to ‘max out’ IRA’s, the true max out is Roth. If you are not doing Roth, you are not maxing out what you could in terms of tax preferred options.
I will try again:
$5500 today plus your tax rate =
That boosted NPV is then compounded over time to create Future Value.
The boosted portion is the leverage, that adds value.
My last comment as I am just really stunned we are debating whether it is better to maximize the IRA deduction or not ($5500 pretax is not maxing, when you can put $6600-$7000 pretax equivalent).
You argue that $5500 pretax gives you flexibility and you can convert in the future if you want. And what would that $5500 convert into Roth wise? $5500? Hell no. You let that ship sail for ‘leverage and options’. That $5500 would convert at $5500 * (1-tax rate) or $4K-$4.6K. If Average Joe follows that advice, they simply let $900-$1500 of potential tax deferral walk out the door. But hey, he got leverage and flexibility and that only neutered his tax preferential savings potential by 15-39.6% per year but what is that between friends. Again – stunning.
Igoringa, you quickly gloss over a reasonable answer by writing “tax rate neutral”. Seems like you’ve set the parameters of the discussion to leave that out, and then you have the audacity to argue, take up Matt’s time/energy (Matt, thanks, but you don’t need to debate here), and then call yourself “stunned”!
Have you thought about people who live where SSI and/or pensions aren’t taxed? Have you thought about the great majority who, because they’ll be pulling in less money in retirement, will see their marginal tax rate decrease?
Of course you did, because you took that info off the table for your rants.
Sorry, ego, but I’m not a fan of people who demand to only argue what they wish to argue, dismissing that which doesn’t support their positions, and yelling “see, I’m right!!”
Matt, you are much more patient than I.
Apparently your knowledge of financial modeling is consistent with your patience. No one is debating that if you feel your marginal rate will differ in the future, that would impact your own personal decision.
We can all throw anectdotals out there. You can talk about pensioners and those who fail to save enough (and have a lower tax bracket) and I can point to folks at the beginning of their career making de minimis amounts compared to what they will be. There are examples both ways – which is why when someone makes a statement stating one method is universally preferable it is open to challenge, particularly when you hold the variables constant (and ignore the anectdotals both ways), the math points otherwise.
And also in all modeling (including what Matt did in his other posts), you keep factors constant to isolate the variable that you are evaluating. Sorry finance is so complicated for you.
And in my 20 year career I never thought I would see an expression such as
Pretax Contribution PLUS tax rate = NPV
Last word is yours and I shall remain speechless
I sincerely doubt that.
I am happy for a different opinion, but please do so with with courtesy to myself and the other readers, the same courtesy that I have extended to you by attempting to acknowledge and discuss your perspective. If I have time, I will write a follow up piece on this so you can delve into it further and we can debate, but if I do that please try to watch your tone when conversing, as a self professed 20 year financial professional I am sure you have the ability to not be an ‘internet asshole’ as we explore different perspectives. I use that term based on your tone directed to DiffPaul, which I think is ill befitting intelligent discussion.
“Sorry, ego, but I’m not a fan of people who demand to only argue what they wish to argue, dismissing that which doesn’t support their positions, and yelling “see, I’m right!!”
Matt, you are much more patient than I.”
Sorry ‘EGO’, my response to DiffPaul was in a tone commensurate with his tone in the quote above. Nothing more; nothing less. Ironic such tone by him generated *crickets* in response.
And you are very much right with your comment in the Ramsey post – your advice in this post was very much a Dave Ramsey style post. In terms of maximizing your IRA options, if forewent the mathematical maximum in exchange for simplicity, and generating action, which is fine. But Dave Ramsey admits the debt snowball is not the best mathematical answer but states psychology trumps it. Such an admission is/was lacking here – that foregoing the option to put more money (based on either a pre-tax or post-tax measurement basis) away for retirement with a Roth allows for more saving and utilization of tax advantage accounts, but such is worth being sacrificed as advice because of the psychological intangibles. Instead, somehow we ended up debating the math which is pretty much settled science, unless you are speculating heavily on future income tax decreases in combination with the utopian ideal that any tax ‘refund’ generated from the deferral now is automatically invested for the long term (which flies against conventional wisdom and the vary rationale you cited for trying to get people to take action – as we know they are not putting that money into a mutual fund diligently). Oh well.
If you read the very first response I gave you I said that it was the better of the two options, and with too many variables people will procrastinate – I hope that you could gather from that this is a generic solution to a specific problem.
All I am showing you (or trying to as you don’t seem very open to it) is that one option outweighs the other in a very high level view because it has the ability to be changed should you think further on it and decide it isn’t optimal. There really isn’t any downside with that in mind.
Also, I tried to explain the concept of applying the rebate to your initial investment and using the sum total as NPV, which is a valid financial concept, as far as I can see, I haven’t actually read it anywhere, so perhaps it is new to you, but it makes sense if you think about it.
And you don’t have to take a tone with someone just because you feel they have with you.
“All I am showing you (or trying to as you don’t seem very open to it) is that one option outweighs the other in a very high level view because it has the ability to be changed should you think further on it and decide it isn’t optimal. There really isn’t any downside with that in mind.”
So there is no downside to saying don’t put in 5500 after tax because if you put in 5500 pretax you an always convert it to we um not 5500 after tax but much less? You don’t see a downside if someone converts in a year to let’s say 4.3k when they could have put in 5.5k? They lost 1200 in tax deferral opportunity. That is a pretty big downside that mathematically trumps flexibility. We should be telling people to put as much as they can to retirement ….. Maximize what the government will give you if you can do it – and 5500 post tax is more than 5500 pretax by every measure.
Show me one financial concept where npv is ever construed as a pretax amount plus tax. It is double counting and does not exist.
As for tone, yes I don’t have I respond like that or I can, just like you can ignore the tone of those who support you while criticizing those who don’t. Of course your blog so you can send me on my way….
I’m sorry, not being confrontational but I’m having trouble understanding you, the style of your rhetoric in the comments makes your position hard for me to follow, perhaps it is just that blog comment systems can’t highlight these sort of debates clearly enough.
Sure, it’s my blog, and I welcome discussion and debate, and I love opposing views. I mean, it’s always nice to have a ‘great post’ comment but I much prefer questions and challenges as I feel they show people are really taking the time to dig into what I wrote. I’ve just had a bit of trouble with our conversation, but I’d be happy to change that.
Would you like to write out a post with data included (would add more value ) to show your position more clearly, providing it is an intelligent argument, which I feel it could be, I would be happy to post it on Saverocity Finance.
I can understand that perhaps you don’t feel your voice has been properly heard, and that can be frustrating. I would be open to having you author the post anonymously or if you prefer you could use your real name and back link it to your business, using it as a platform to highlight your ability to navigate complex financial matters. If you can offer a better solution than mine then my readers and myself would benefit from reading it, and I know there are better solutions to this post so have at it!
It would be fun for me to riff off too, and I could offer my own thoughts and opinions on your strategy. In the end we all win.
You can email me email@example.com with your submission or any questions about it.
Sorry for the confusion – I phone typing doesn’t help matters. Appreciate the offer for a post but don’t worry about it as the time is about to pass for action. Now that I am back at the computer I will say my piece one last time and let confusion reign.
1) A key tenet to your argument appears to be that putting $5500 pre tax gives you flexibility and to use your words ‘no downside’. It is the lack of appreciation of the down side in terms of foregone opportunity that I challenge the most. For example, lets say Paul puts $5500 in pretax and Joe puts in $5500 post tax. Yes Paul has the flexibility to change going forward and lets say next year he does. If in the 25% tax rate, he would have to cough up $1,375 from his $5500 kitty and give it to the tax man. So stopping right there – he now has $4,125 after tax whereas Joe still has $5,500 after tax. How are these equal? Yes, Paul had flexibility -but that came at an opportunity cost of $1,375 of additional future tax free cash he could have put away day one but didn’t because he chose pre tax vs post. Was this flexibility really worth losing out on that opportunity cost? Mathematically – you wont get there. That is the huge key advantage of Roth in terms of a cap being the same on both. $5500 after tax is worth much more than $5500 pre tax. Roth lets you put more absolute dollars away. That incremental additional amount (which happens to equal your tax rate by definition) has value – A LOT of value, and quite easily in my opinion more value then foregoing that 25% of additional tax preferred savings for some ‘flexibility’ going forward. That was my point.
2) Your NPV argument – I argue that equating NPV to investment plus rebate is double counting. Here is how. Assuming you are in the 25% income bracket, if you put $5500 in a traditional IRA – that $5500 can be broken down as follows: $1,375 of those earnings would have gone to taxes if you did not put it into an IRA; $4,125 would have gone to you to blow on hookers and cocaine. Instead, $5500 went to your investment account with a corresponding floating liability to the IRS when you withdraw (floating based on future effective tax rate). So the $1375 ‘refund’ is already accounted for in the $5500. Adding it again is double counting.
I like to explain Traditional and Roth like this to people (and assuming a 25% tax rate) – You have two choices. You can put away $5500 pretax, or if you are willing to give the government 25% now for the ability to never pay tax on that money and earnings again, they will let you put in more than $5500 of your pretax salary, but actually $6,875 (with them taking the $1,375). Thus by choosing the Roth, you are socking away effectively 25% more than by doing the traditional. I want people to maximize what the government gives them. The $5500 caps are NOT equal (that is what I am challenging).
Hope that makes sense.
The point we are confused on is this:
In my version, if I put in $5500 and then roll over to the Roth I would go from $5500 in Traditional to $5500 in a Roth. I don’t have to deduct from the IRA to pay the transfer taxes that stem from the 1099-R form. I can pay them from my paycheck.
That is why I said you could control the duration of the deferral to any time you like between now and 70 1/2 years old, any time that your income drops or the tax rate drops you roll over and you pay the taxes.
Now – if the $5500 has appreciated 10% and is now $6050 your tax bill to roll over the entire amount would have increased – you could do a partial rollover here of just the $5500 or you could do the full amount.
The point about NPV is that if you got a rebate of $1375 on your $5500 and that also was invested in the same asset, it too would have appreciated 10%, so you would have captured the profit on this money, the $137.50. Let’s say you put that into a taxable account, you can then use it to offset your increased tax bill. The $137.50 would be capital gains, so lets slice 20% off the top (to be overly conservative in our numbers) would leave you with a net of $110 which you would then be able to use to pay the difference in appreciated traditional IRA rollover taxes.
More simply, you would have $1375+110 for $1485 tax paid money sitting in brokerage which you would use to make an additional quarterly tax payment to account for the $6050 that was added back onto your regular income, and you would have a Roth with $6050 in it in this scenario.
Does that make sense?
Yes, makes more sense to me now on the traditional component.
I still don’t buy the ‘rebate’. To the contributor, by putting in $5500 it will not seem like he got a $1375 rebate, it will seem like he has $4125 less in take home (because he does). Asking him to put another $1375 aside without him being ‘forced to’ (which a Roth does – it forces that) is asking a lot… keeping in mind the hope is to just get money invested, reduce variables/uncertainty etc… tough human nature sell to put that cash to the side.
Also I do believe the return of $5500 Roth in most scenarios outperforms $5500 pretax + 1375 taxable (by the exact amount equal to the tax on the 1375 future income). Thus, there still is a ‘penalty’ you are paying if you use this 1375 in the future to convert (again equal to the tax paid on the income that 1375 generated whereas if you had put that 1375 in the Roth to begin with it would not have had its income taxed).
In hope of clarifying.
1) an individual who maxes out using Roth will have more tax preferred retirement income than someone who goes traditional.
2). A person that goes traditional at 5500 then converts will be in a lesser position (have less saved for retirement) than someone who went 5500 Roth to begin with.
Given what the objectives are with putting away for retirement, how is this wrong? The flexibility to put yourself in a position worse than if you just rioted to begin with just doesn’t seem to be of high value I me or the objectives Of retirement investing.