The internet loves a good argument. Winter or summer. Beach or mountains. Bacon or sausage. And of course — Roth or Traditional.
Spend five minutes reading financial content online and you'll find passionate camps on both sides, each one ending with the same conclusion: everybody should be doing X.
Here's the problem with that. "Everybody" doesn't have your income. Your tax bracket. Your pension. Your Social Security picture. Your timeline. And "everybody" definitely doesn't have your retirement income plan — because most people don't have one at all.
The Roth vs. Traditional debate isn't a debate. It's a false choice. And for most people, the real answer is surf and turf.
You Don't Have to Choose
Think about the last time you went to a great restaurant starving. The steak looks incredible. So does the lobster. Most restaurants don't make you pick — they offer surf and turf. And if it's not on the menu, it's usually available for an upcharge.
The same logic applies here. For the overwhelming majority of people, you don't have to choose between Roth and Traditional. You can do both — and doing both is almost always the smarter move.
Here's the most common way it works: you contribute to your workplace retirement plan — your 401(k), TSP, 403(b), or 457 — on a pre-tax basis. That gives you the tax deduction today. Then, separately, you make contributions to a Roth IRA. Two buckets. Two different tax treatments. One coordinated strategy.
The Two Questions That Actually Determine Your Answer
When someone asks me whether they should be saving into a Roth or a Traditional account, I always come back to two questions:
When do you want to pay your taxes? And how much do you want those taxes to be?
Simple questions. Genuinely difficult to answer — because the answer requires an actual analysis of what your tax picture looks like today versus what it's projected to look like in retirement.
The easy argument is: taxes always go up, so pay them now. And yes, tax brackets do tend to increase over time. But that's not the whole story.
Most people in retirement have some form of fixed income — Social Security, a pension, or both. Factor those in, and your effective tax rate in retirement is often 8 to 10 percentage points lower than it was during your working years. That changes the math significantly. It may mean taking some tax breaks today — through Traditional contributions — makes more sense than paying taxes upfront on everything.
The point is: you can't answer this question with a blanket rule. You answer it with a plan.
Why Tax Diversification Is the Real Goal
During your working years, you have almost zero control over your taxes. You earn a dollar, it gets taxed. That's it.
But in retirement, everything changes. You get to choose where your income comes from — and that choice determines what you pay in taxes.
If all your money is in a Traditional 401(k) or IRA, you have no choices. Every dollar you pull out is fully taxable as ordinary income. No flexibility. No options. Whatever the IRS says you owe, you owe.
But if you've built savings across all three tax buckets — tax-deferred accounts like your 401(k), tax-free accounts like a Roth IRA, and taxable non-retirement accounts like a brokerage account — you can pull income from different sources strategically. You can manage your effective tax rate. You can avoid unnecessary Medicare premium surcharges. You can control how much of your Social Security gets taxed.
That's what tax diversification actually does. It puts you in the driver's seat on taxes in retirement instead of just reacting to whatever bill shows up.
What If You Think You're Ineligible for Roth Contributions?
This is where a lot of higher earners check out of the conversation — but they shouldn't.
Yes, there are income limits for direct Roth IRA contributions. In 2024, the phase-out begins around $168,000 for married couples filing jointly and is lower for single filers. If you're above that threshold, you can't contribute directly.
But you can still get money into a Roth IRA through what's known as a backdoor Roth conversion. The most common approach: make a non-deductible contribution to a Traditional IRA — there are no income limits for this — then immediately convert it to a Roth IRA. There are also no income limits on Roth conversions themselves, only on direct contributions.
Some workplace plans also allow after-tax or Roth contributions that can be rolled directly into a Roth IRA. It's worth a conversation with your financial planner and your plan administrator to find out what's available to you.
The bottom line: ineligibility for direct contributions does not mean the Roth door is closed. It just means you need a slightly different key.
Stop Arguing. Start Planning.
The Roth vs. Traditional debate will never end online — because it's being argued without the most important variable: you.
Your income. Your tax bracket today and in retirement. Your Social Security timing. Your pension if you have one. Your savings rate. Your timeline. Put all of that together and the answer becomes clear — and it's almost always some version of both.
Think of it like building a house. You wouldn't hand someone a pile of lumber and say "figure it out." You start with a blueprint. A financial plan is that blueprint — it tells you exactly how much goes into which account, why, and how it all works together when you retire.
If you don't have that plan yet, that's the starting point. Not the Roth vs. Traditional argument. The plan.
Watch the full video and more content on YouTube: @JasonBowersFP
Converting from a traditional IRA to a Roth IRA is a taxable event. A Roth IRA offers tax free withdrawals on taxable contributions. To qualify for the tax-free and penalty-free withdrawal or earnings, a Roth IRA must be in place for at least five tax years, and the distribution must take place after age 59 ½ or due to death, disability, or a first-time home purchase (up to a $10,000 lifetime maximum). Depending on state law, Roth IRA distributions may be subject to state taxes.