A new client and I met for the first time this past March. She was quite upset about a tax bill she was going to have to pay in April because of a problem with one of her IRA's.
Insights & Other Important Communication
The question is quite common. Now that Roth contributions are available in 401(k)'s as well as IRA's, clients always want to know which is better for them. With both options money is tax deferred, but in the traditional model you defer your taxes until you take the money out. In the Roth model you pay taxes on your contributions but get to take your distributions tax fee. While the money is tax deferred you usually have the same investment choices to select from so the only real difference is where you pay your taxes; on the money you put in or on the money you take out.
Last week the Social Security Administration released the 2012 OASDI Trustees Report which has both sides of the Social Security debate fired up. This report tells us exactly what is going on with the social security program but without the political interpretation. As Sergeant Joe Friday used to say on the TV show Dragnet "all we want are the facts, ma'am", so here are the facts.