Alright, I know this has been done before, but please help anyway...
DH and I finally both have (semi) real jobs... base salary right now hit around $93k combine. But DH may make another $13k over the summer, not sure yet.
We have enough flexibility in the budget to put $11k towards IRA or RothIRA and around $20k into a 401k. My question is how to do it. We already have rothIRAs (with USAA, target funds), and these have been maxed every year for the last 5 years. I also have a rollover IRA from an old job that's currently needing help (separate issue).
My question is this: Would a Roth or a regular IRA be better?
MAGI looks like it will be the maximum of $86k. My thought is that if we do the IRA, we could then let it reduce our taxes and (since I'm rounding numbers a bit high here), we'd be eligible for the lower tax bracket.
But if we do a Roth IRA, we would be in a higher bracket now, but would have no taxes on withdrawal... and we will probably just keep going up in taxes.
Also, there is no match for the 401k (neither of us are on long term contracts, 1 year for me, 2 for him).
So any help here? IRA and get into the 15% tax bracket now? But pay more in taxes later... Or RothIRA now and be in the 25% tax bracket? But of course, no taxes later... Also, our state is flat tax (CO). Finally, there is a chance that DH might still make a little bit in SE income that could still bump us to the 25% bracket, but only on $1-2k. There is no investment income or capital dividends or anything in consideration.
tl;dr : Roth or IRA?