Edit: update I decided on a CD. I may do an index fund in the future. This was a short commitment and easy to understand. Thanks everybody.

  • CrimeDad@lemmy.crimedad.work
    link
    fedilink
    English
    arrow-up
    1
    arrow-down
    1
    ·
    3 months ago

    I understand how having a higher income and tax rate in retirement makes a Roth attractive. However, the comparisons I’ve seen don’t fully account for the opportunity cost of paying the taxes up front in the case of a Roth, since a traditional IRA lowers your taxable income by the amount you contribute. This tax break allows for a greater contribution. In other words, I think a fairer comparison would show a greater initial contribution for a traditional IRA.