There’s a lot of hype about the Roth IRA. With a Roth IRA, you pay taxes on the money you invest but you don’t have to pay taxes when you withdraw the money. The traditional IRA and 401(k) is the exact opposite: you invest pre-tax income, but you have to pay taxes when you withdraw the money at retirement. So if your current tax rate is lower now than it will be in retirement, the Roth IRA is a better place to place your money than a traditional IRA/401(k). If you mathematically model the post-tax values of both investment accounts, you can clearly see that this is true: read more »