I have a feeling I'm going to like this new category ;)
I love your site. I have read all of your articles. You are my hero Jeremy!
Sorry for the very late reply. Thanks Indexmantra!
EDIT: Some of GCC's other tax-related posts, per a suggestion:It's worth noting that, while much (all?) of the remaining advice is good, GCC is incorrect when advising people how to evaluate the tax effects of traditional vs. Roth. Bogleheads, Michael Kitces, and The Mad Fientist clearly get it right. Comments from The White Coat Investor (TWCI) and The Finance Buff (TFB) are less clear, but TWI seems to err the same way as GCC, while TFB gets it right.
Separately, I just realized that the "Roth Sucks" post isn't included in the Go Curry Cracker sticky, so I would also suggest adding it there:
It's been nearly 2 years and you are still pointing out that you don't like my Roth post, so let me applaud you for your persistence :)
We've had this conversation a few times, and it feels a bit like a stereotypical family Thanksgiving dinner:
A high school kid is really excited because in Science class he properly calculated how far they would launch an experimental canon ball.
When the Uncle everyone loves hears this story, he immediately points out how the high school kid should have used differential equations rather than linear algebra, failed to account for the curvature and rotation of the Earth, and didn't properly factor in wind speed, wind direction, and the density of the atmosphere.
It probably isn't his fault (he's probably an Engineer or something) but the result is that the high school kid is heart broken.
This same type of conversation happens in real life all the time.
People ask, "should I invest in a Traditional or Roth IRA?" Well meaning good samaritans immediately start talking about marginal tax rates, the different tax treatment of the two types of IRA, the RMD, potential inheritance factors, etc... Notice the great availability of blog posts and Internet articles that say this very thing (thanks for summarizing them here.)
And 99% of those people (sub-optimally) throw their hands up and say, "Fuck it, I'll just invest in a Roth. At least I know I won't pay more tax and I can at least get my contribution back anytime if I want to buy a jet ski." (The 1% who don't say that frequent the MMM forums ;) )
The sad thing is, the high school student wasn't wrong. And neither am I.
For the target audience of my blog (median to high income earners who are happy to save a high percentage of income to retire early) they will have greater lifetime wealth (and minimize their lifetime taxes) by choosing Traditional over Roth. They will benefit greatly from the 0% and 10% marginal tax rates on withdrawals. They don't need to use differential equations or account for the curvature of the Earth. When they read my blog post, they make the right choice.
Now you might say, but they could do better! This is possibly true, for some very specific and limited circumstances.
There might be an optimal Roth/Traditional/Brokerage account split that results in maximum wealth and minimum taxes, but that requires predicting future investment return. Whoever figures that out will deservedly receive the Nobel Prize in Economics.
Until that time, I'm content with "clearly getting it wrong." But you are still welcome to come hang out at a GCC Thanksgiving.
All in good fun,