This article is the result of my opinions, based of course on facts, but should not be taken for anything other than that. It would not be fair to not bring out information regarding the benefits of Roth IRA and place them in from of people who are smart and do their retirement planning on their own.

Several financial advisors are not prone to either advocate or dismiss this issue, and there are several valid reasons for such middling behavior. In my case, the Roth IRA seems much more advantageous than the regular IRA, because of a the presence of a single reason, that is, I prefer to know exactly how much I have to pay as taxes now, rather than spend an unknown amount because of investments and their returns.

At present, I know the tax brackets and my relative position in them. I am also aware of how much tax I have to pay on my current income, income that I work hard to receive only 65% of it. These figures are all represented in the form of today’s dollar value, and I prefer paying that amount today, when I know how much I have to pay, rather than at a time when this figure will not be known to me and nor will I be aware of my actual retirement savings.

Federal Retirement Laws

Several people are quick to point out that the laws governing Roth IRA may change at any time. Although this is true, thee reverse, where the laws regarding 401(k) may be altered, is also just as true. IRS can easily decide to make publication of tax codes an art form, and release the next year’s codes in Greek, and you can be sure that the average person will never know the difference. Sometimes, I am half convinced that they do such things even now, just to have a good laugh in private. All the jokes aside, I am much in favor of retaining maximum possible control on my money, so that I can have it when I need it, instead of writing off taxes then that I can easily pay today.

Paying taxes later than the actual due date is similar to having a credit card which has 0% interest for a whole year. However, what is rarely mentioned in bold font is that the honeymoon period is only of one year, and once it is over, the percentage figure can go well over 20%. I presently have no divining powers that enable me to predict my taxable income in the future or the amount of taxes that I will be due to pay after five years, leave alone the time when retirement finally arrives for me. Attaining the peace of mind through not having to wonder if the money I will have left after paying off all taxes is, for me, worth all the inconvenience of having to make tax payments on my funds today.

In case, you need better news to be convinced, you should peek at the next few sentences. When you decide to not pay taxes on the final amount, you actually add several thousands of dollars to your actual income by investing the maximum possible amount for 50 years or so. In case you are later and begin so that you have 30 years of investing to go, you still have a considerable savings from it. Bottom line remains that every extra year of investment adds a considerable amount to your account. However, eliminating all extraneous taxes on your income is the best way to maximize savings for your retirement plans.