“You do not report Roth IRA contributions on your return.”
(The IRS,
http://www.irs.gov/publications/p590/ch02.html)

I’m going to sound like a Vanguard shill, but, as a young person just starting her investments, their customer service has been awesome at explaining everything and not making me feel like an idiot. Just my 2 cents for any other young folks that might feel too intimidated to get started!

Your tax bracket 30 years from now will depend on how much you’re taking out of your retirement accounts per your retirement income- right? So you could take out the same amount that you’re making today, 30 years from now- ending up with the same amount of taxation regardless.

Then say you’re investing into your Roth with a high tax bracket per your income today, but expect to take less out per year upon retirement requiring a smaller tax bracket- thus having been taxed more at the today then you would tomorrow.

This entire post’s content is new to me so I very well could be misunderstanding the logic; please enlighten me.

On the other hand, I finally set up a Roth IRA for myself last year, at the age of 33. It’s at TD Ameritrade, mainly because numerous family members have their retirement accounts there and it makes it easier for my retired dad to keep an eye on all of us (and we’re grateful for the help). Their site is very…meh. But call them up, 24/7, and you get amazing customer service. Trades are $10, and funds/bonds vary. Some don’t cost anything if you buy enough, or hold them for a certain period of time.

I’m following the stock to bond ratio formula of 110-current age for % stock holdings, the rest in bonds. In order to have the most invested for the year (and thus potentially growing and reaping dividends), I’ll max out the Roth by May.

To get money into the Roth, I have recurring transfers set up each pay period, but I also “rebalance” my checking account every pay period, and alternately throw anything above x amount into my Roth or into savings. This typically at least doubles my planned contribution rate every month. It’s all about mind games.

I contribute 15% of my gross salary to my 401(k) and get a 2% employer match. Once the Roth is funded, I’ll increase that contribution rate until it’s maxed out for the year, then put all other excess into savings.

nuthin’ ’bout balancing the checkbook.

I’m a social worker and very familiar with Medicare and Medicaid, and I worked in a Medicaid nursing home. When you talk about Medicaid you’re talking about having income less than $10,000/year and no more than $2000 in assets… I don’t think any of is is planning to be in that boat.

I work with disabled people and they have by and large been very poor, so I’m not familiar with higher incomes. What’s something a senior can qualify for with $40k of taxable income but not $60k?

When I worked there, there was no way to have the sales load on a mutual fund waived. (In fact, I was under the impression that it’s not legally possible because the sales load is set out in the prospectus.)

Of course, switching funds within the same fund family doesn’t incur a sales load, but that would be the case regardless of whether the client is a friend, family member, or total stranger.

Bottom line: I’d rather pay the taxes now and get them over with. I don’t want to have to worry about being in a high tax bracket when I retire.

Your taxable income is used as a means-test for MANY programs, housing, etc as a senior. If all of your income aside from Social Security is non-taxable as a senior in retirement, you are more likely to qualify for things you may not be able afford without the subsidies or may not be as good. For example, you may need to be in a nursing home but the best one in the area is run by a non-profit and you must pass a means test. Guess what, that Roth IRA income won’t be counted.

Secondly, income tax rates across all income levels are HISTORICALLY low by ten to twenty percent for many brackets. Even if you are within 10 years of retirement and think you are making the most you will ever make, chances are you are paying less income tax now than you will pay in retirement once taxes rise to pay for the massive deficits run up in the 2000s.

Now that I cleared the pot for my 20% down and I save 10% in my work 401k, I’m trying to evaluate if I should just use the Roth as my 10% savings pot for everything else beyond my or just limit it to what I can afford to lock away for retirement. Yes, you can always take the earnings out…

and i’ve been looking at your website too. good stuff!