Quote from: MidWestLove on December 11, 2016, 10:57:29 AM
Generally
-> if you can lower your income (get deduction) by using traditional IRA [and your tax bracket is higher now than you expect in retirement] -> use traditional IRA [otherwise use Roth].
-> if your income is higher than that but still within Roth allowed limits -> use Roth
-> if you make too much to contribute to Roth in specific year -> tIRA [and then Backdoor Roth IRA] and its 'tax free growth'
Don't know if you were assuming the edits above.
.... I don't disagree with edits jut I don't think it matters much - I consider helping people take action much more important than sending them many many disclaimers (your situation may wary, contact your licensed professional, etc.) because that is exactly how people believe they get overwhelmed. Who knows their tax rate decades down the road? who knows what laws may or may not pass before then? who knows what other systems would run in parallel and how they would treat specific income streams (see ACA for example of how income is treated or see special rules for child credit or for earned income ,etc.)? point is that certainty does not exist, be directionally correct, have an idea of where you are going, adjust, but above all MOVE. without movement and forward steps you take, spending time on the above is waste of it.
Whether you convert your tIRA to Roth right away or a little later or years later - matters less (same paperwork, may or may have small tax item) than having tax year contribution to begin with (without funding something the question is academic as there is nothing to convert). However, if you miss specific tax year for your whatever contribution (401k, 403b, 457, etc) you cant go back (ignoring higher limits for over 50 crowd for now which congress labelled as 'catch up').