Roth Is Wrong—for Some People (Part II)

In my August column, I wrote that Roth is wrong—for some people. Basically, my analysis was that, for many, and perhaps for most, participants, their retirement incomes will be so low that they will pay little if any taxes on that income. However, if they were making Roth deferrals while working, they were paying income taxes on the deferred amounts. Thus, in making pre-tax deferrals, they violated one of the basic principles of taxpaying: Always pay your taxes when you are in the lowest bracket.