Which type of Retirement Account is best for Investors

[Karina Ruiz]

So I'm trying to decide whether it's more efficient to invest in a traditional IRA or Roth IRA. I'm planning on retiring before retirement age, so I was leaning towards the traditional and then do a Roth conversion ladder. But I'm also planning/ hoping that by the time I retire my rental income will be equal if not higher than my current salary. I was wondering if any investors are currently doing a conversion ladder and if so if the tax write offs from your properties is enough to get taxed at or below 30% tax bracket, for example. Which do you think is the better option?

[John Underwood]

If you are younger a ROTH is much better over time. You can also pull out money for college or first time hine purchase with no early withdrawal penalty. Read up on the specific rules.

You can find charts that compare traditional vs ROTH IRA's.

The way I explain it to people is you can pay tax on the seeds or on the crop. The tax on the crop would be much higher as it is worth more.

So pay tax on the front end when money goes in and grow it tax free afterwards. The withdrawls are then tax free at retirement in a ROTH and there are no RMD.

I am acquiring as many rentals in my ROTH as possible and I occasionally flip a rental property I have and guess what? No Capital gains are owed because the taxes were paid on the money when it went into the account! This is huge!