Tom is trying to decide whether to open a traditional deductible IRA or a Roth...
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Tom is trying to decide whether to open a traditional deductible IRA or a Roth IRA. He is currently in the 25% tax bracket. (We will assume that he qualifies for a tax deduction on the full $6,000 contribution that he makes to a traditional IRA.) Tom has 40 years until retirement and is planning for 20 years in retirement. He expects to earn a 9% rate of return. All payments are made at the BEGINNING of each year. 1. Which type of IRA provides higher retirement income if he is in the 25% income tax bracket in
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