offered a choice, most people would elect to pay no taxes when accessing funds in retirement. However, most people have not spent years (decades) funding a Roth IRA or Roth 401(k) and instead have focused on funding “tax-deferred” tools.
Answer the following question: Is it better to pay taxes on the harvest or the seed?
Or put another way, is it better to pay taxes NOW if the after-tax money can grow tax-free and be used tax-free in retirement?
The answer is, it depends. Depends on what? Your age, but generally speaking, if you are under the age of 55, paying taxes on the seed is much better than paying it on the harvest when in retirement.
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