Posted 3/12/2010 2:32 am
The tax benes are too great for the feds to give to the rich. If you the do math, Roth outperforms any other vehicle by a huge margin...
Posted 3/12/2010 2:40 am
Wait a second.. I'm reading that there are no longer any income limits in converting traditional IRAs to Roth IRAs. So rich people can now contribute to Roth IRAs in a 2-step process? (contribute to traditional IRA, then convert to Roth IRA?)
depends on your tax rate now, your tax rate in the future and the rate of return on the portfolio. With these factors you can solve as a net present value problem. Then again do you trust the future government to keep Roth distributions tax free?
Motorcycle. To replicate for total dollars in a Traditional IRA you also invest the amount saved from taxation into a normal taxable brokerage account to compare apples to apples returns after tax once you unwind.
Since USA has so much debt and unsustainable obligations, the US government will probably hit a major fiscal crisis within the next 30 years, similar to what Greece is facing now.
In that financial meltdown scenario, the US government will be scrambling for dollars to pay off their debts.
They might print money (hyperinflation).
They might raise taxes through the roof.
They might do both.
But either way, I'd say that in that financial meltdown scenario, where the US government is scrambling for dollars, the tax-free nature of Roth IRAs may be jeopardy.
