https://pca.st/episode/ae219cd0-3a00-423b-8dcc-a042d19f0774 Highly recommend. An extremely well articulated argument FOR using a traditional IRA over a Roth IRA. Thanks @microscopic-psychiatrist-27869 for the recommendation

I don’t have an hour. Is there a short / written version? Does she account for the fact that ROTH contributions aren’t locked until retirement which makes them great for people that are afraid they’ll need the money earlier?

She does both. General idea of roth vs traditional. She does not address the idea that you can take out Roth money early if needed

So I’m guessing the argument is something like assuming a constant tax rate, and a max contribution of N dollars per year, you’ll end up with more money when you retire contributing N post tax dollars a year. Basically optimizing for getting the most out of the contribution limit.

no, she shows that even if tax rates go up, you still are better off traditional

There's realistically no way for the tax advantages of a Roth down the line to outweigh the benefit of a tax deduction today

^ ^ Definitely disagree with this strongly

Even for most real estate investors (of which most high-volume investors are probably reinvesting in RE and not IRA/401k anyway), they need to assume that they will make so much taxable income in retirement to be in a higher marginal tax bracket than their current marginal tax bracket. In order for someone to invest enough money to create large RE investments, they'd first need to HAVE super high income to have free cash for those investments, in which case, if they are investing in some type of IRA, the tax deduction is still probably better than paying taxes now in Roth

Someone who is a full time job and doing real estate investing on the side or has a side business they started is a very legitimate example ( and I can think of and have seen many great examples ) Eventually after 40 years he might have a few dozen doors focusing on this on the side. In Baltimore (the only real estate market I can comment on) that would already put you in the highest tax bracket.

That comes back to "if you will be in a higher marginal tax bracket in retirement" which for the vast majority of people is not the case due to both most people not being in the higher marginal tax bracket, and the many factors working against ending up in a higher tax bracket, even with increased income For example RE, if you are depreciating most of your RE income, you can have more income and be in a lower tax bracket (Hello Roth conversion ladder 🙂)

There's realistically no way for the tax advantages of a Roth down the line to outweigh the benefit of a tax deduction today

Sounds like you agree that your earlier statement is not correct? That there are realistic ways that roth is better just not for most? Or am I missing something?

A big caveat to this whole thread which is a very big one is that her theory only works under the premise that you INVEST THE TAX SAVINGS OF YOUR TRADITIONAL CONTRIBUTION which I think almost no one does.

True but we're talking about optimizing here. Forced savings via taxes for Roth is not an optimization

So... should I start investing in trad IRA?

Are you eligible based on income? Or are you in backdoor roth territory?

This year I am in backdoor roth range. Next year I will be right on the border but probably still in backdoor roth.

then skip the TRAD ira. pretax contributions in your IRA complicate backdoors

You don't qualify for an IRA tax deduction if you have a 401k plus income over a certain threshold