Is a Roth IRA better if taxes are higher in the future?
Shaun D. Huguley
Roth individual retirement accounts (IRAs) are funded with post tax dollars and Traditional IRAs are funded with pre-tax dollars. Traditional IRAs are taxed when the money is withdrawn. It has been said that if taxes are higher in the future, then it is better to use Roth IRAs, but such analysis does not take into consideration that if income is lower than certain thresholds, a taxpayer can receive credits. We use simulations to see if a Roth IRA is always better when taxes are higher in the future.
Alan A. Veliz-Cuba
Primary Advisor's Department
Stander Symposium project, College of Arts and Sciences
United Nations Sustainable Development Goals
Decent Work and Economic Growth; Reduced Inequalities
"Is a Roth IRA better if taxes are higher in the future?" (2022). Stander Symposium Projects. 2524.