Just a wild ass guess.

Typically if you are not earning income you'll be in a lower bracket, but who knows.

The big thing with ROTH is you put the principal investment in after tax. Any gain/growth/appreciation is tax free. So if you put 300K in after tax over the life the account, and the value of the account is 500K when you retire, you got 200K tax free. You paid tax on the 300K before it went in and nothing on the back end is taxable.

That's the big draw of a Roth.

EDIT: Should include the comparison.

For a traditional, If you put in 300K over the life of the account and it's worth 500K at retirement, sure you get to deduct the contributions going in, but the whole 500K is taxable on the back end.
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For Rainman, this is a nice video breakdown of investing in dividend stocks, and I'll wait patiently for the obligatory Lewdog to say it isn't free money. LOL. Love you Lew!


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I think the financial industry starts with an assumption that tax rates across all income levels will be generally higher in the coming decades.

I've had a financial advisor explain his belief that half Roth and half Trad is the way to go in order to take advantage of both a current and future benefit, but it's grounded in concerns that Congress will take away the Roth benefit, which I've never heard anyone else share a concern of, and the thought that a buck today is better than X bucks tomorrow.
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Was Hellen your financial advisor?
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It looks like the Fed is going to have to raise rates through at least June.

Inflation just won't behave like the Feds want.

5.25% from the Fed by July is the consensus.
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The Fed has fucked this all up. :-)
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That’s assenine for anyone under like 45 or 50.

Tax rates are almost exclusively higher when you’re earning income (while you’re working) than when you’re not (retired, drawing from your retirement instrument)

The difference is GAINS in the Roth are not taxed ever. The basis is taxed when it is put in (basically - there is no tax shelter, but there are ways you could contribute non-taxed earnings - like gains from the sale of a home or restitution or some shit but for all practical purposes, let’s say ROTH dollars are taxed when you put them in), but if it goes up 100% between when you’re 40 making the contribution and 70 when you’re pulling it out, that means half of it wasn’t taxed. Or put another way, your tax rate would have to be half of what you’re paying now, and let’s be real here, if your tax rate is half of what you’re paying now you’re going to have a miserable retirement.

And especially for young people, early basis can yield waaaay more than 100%
Gain.

Do the ROTH.
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Yeah, I agree.
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I was thinking about something the other day involving tax rates, and I think the government is running a little IRA grift on us. It's still better to put money into an IRA than to not do it, but this is something I'd never thought about.

If you put money into a stock in an IRA and the price grows, then yay, you make money. When you eventually take it out, you pay regular income tax on the gains, which is going to vary, but it's almost certain to be 22% to 35% for most people.

If you bought that same stock in a regular investment account, you're going to pay capital gains tax when you sell it, which is probably going to be 15% for most people.

So by holding it in an IRA, you end up paying a higher tax on the gains.

Now, it's still better to put it in an IRA because it's pre-tax money going in, which gives you a bigger investment, and the taxes are deferred for many years, but I'd never thought about the fact that you take a bigger bite coming out.

Am I thinking about this right? Do I have any wrong assumptions?
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Depends on what you have coming in for income in Retirement. If you're at 35% at age 40, and 22% in retirement, that is almost a wash. But if all you have is SSA (not all of which is taxable) and a RMD and (more, some of those are ROTH), it's pretty easy for a taxpayer and spouse to get under 83K, putting them in the 12% bracket, so the gains would actually be CHEAPER than at any time in history.

Plus the time value of the tax dollars you didn't have to pay, presuming you're getting a return on that.
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I would consider the state tax implications for those of us living in states that have state income tax. A lot of states will limit or exempt retirement income entirely, and IRA distributions are included in that, whereas no such limitation/exemption exists for capital gains taxed by the state.
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Leaves out all the years of dividend tax drag though.

On the other hand, if you retire early or only have social security, you might be able to use 0% LTCG rate. I believe It goes up to 100k for a couple with standard deduction
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Silicon Valley Bank just went tits up. I have a friend in the start up aerospace industry. Their company may have just lost almost all their cash and have about 4 months of money left on hand.
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Very dark situation. Never thought I'd see a bank-run at this scale. The bottom line is SVB bought up too many assets with zero percent interest rates and when the fed raised the rates couldn't survive their CEO giving some dumbass "hey don't panic guys" speech. Disaster.
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FDIC coverage on any of it?

I have a little bit of capital outside of FDIC coverage. Perhaps I should check on the fiscal health of my bank.
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