Hi there!
I'm researching Traditional vs Roth IRAs and I think I have a pretty good understanding of each and their associated pros/cons, but I can't quite find a definitive answer on this topic, so I need some help.
If a person's Modified Adjusted Gross Income is above the Traditional IRA tax deduction limits, yet below the Roth contribution limits, and their employer does provide a 401k plan, which is the best choice?
For argument, let's assume MAGI of $75,000 in 2014, Single filer, 401k plan offered by employer.
I'm thinking Roth for the following reasons:
1) You wouldn't get any initial tax benefit from Traditional contributions (so at time of contribution, they'd be equivalent)
2) You would have to pay taxes on distributions/withdrawals on the Traditional in the future (so this would favor the Roth)
Is this right?
Thanks,
MW