Anywho, back on topic, after brushing through the material, I talked to my mom/CPA again and she's still all for the Roth only. As she puts it, I'm relying on a loophole and (not to get political) Biden wants to close it. She also mentioned that he wants to replace the tax deduction with tax credits, so "the math wouldn't work out" according to her. So if his bill passes, how would us FIRE and FI people be affected?
OK, I think you are getting bad advice and you should only do Roth in select circumstances in the 12% and lower brackets. If you have it in your power to keep yourself entirely in the 12% bracket by using a different type of retirement account, then by all means do it. It is speculative whether you will be in a 22% or higher or lower bracket when you retire, but lowering your taxable rate on all income from 22% to 12% right now is guaranteed.
Let's say that you earn $64,000 next year. Standard deduction makes that $64,000 - $12,950 = 51,050. Ignoring state taxes, but those would tend to work against Roth even more. You decide to use all Roth. You pay 10%*10,275 + 12%*31,500 + 22%*$9,275 = $6,848 in taxes, dropping income to $64,000-$6,848 = $57,152.
Suppose you maxed out a 401k, IRA, and HSA. $64,000 - $20,500 - $3,650 - $6,000 = $33,850. Minus the standard deduction $33,850 - $12,950 = $20,900 in taxable income. You pay 10%*10,275 + 12%*10,625 = $2,302.5 in taxes, dropping income to $61,697.50. Quite a bit more money then the Roth, even before any reduction in state taxes!
Additionally, if you keep yourself entirely within the 12% bracket, you pay
no taxes on long term gains. So that should be an additional incentive to keep your MAGI under $41,675.
But look! Down there in the ground! Is it a worm? Is it a mole? No, it's the Saver's Tax Credit! If you maxed out all three tax-advantaged accounts, your income dropped to $33,850, low enough to get under the $34,000 needed for the Saver's Credit! The IRS straight up gives you $1,000 for being a good little citizen!
The Saver's Credit is just one example. There are many obvious thresholds where staying below it is much more advantageous than going below, but it isn't always possible to anticipate which ones will be applicable to you. So, as a general principle, it is more or less always in your best interest to max out traditional retirement accounts whenever possible. Sometimes you will be surprised at what turns up. For example, I had no idea about the Saver's Credit until Turbo Tax magically popped it up. I don't remember if there was digital confetti, but if not then there should have been. Another example was the government handouts in 2020 and 2021. We technically made too much to qualify, or maybe only at a reduced amount. But, thanks to always maximizing our 401ks, IRAs, and HSAs, we got the full amount. Several thousand more! There are others I have less experience with, potentially including FAFSA, ACA, and state taxes. If the government offers you a way to legally overlook some of your income, then I highly recommend you take it! There are many financial incentives, above and beyond the headline percentages.