Radio talker was off-base about Roth IRA

DEAR HARRY: A little while ago, a guy on the radio said that Roth IRAs were poor investments. At least, they are not a good way to build for retirement. He also said the government did this so it could get its taxes early. He went on to say that paying fewer taxes during your earning years as opposed to more taxes later does nothing to build current income. My math was never very good, but I know that paying taxes now on my Roth withdrawals would be much more than when I put the money in. In addition, I am not obligated to withdraw a specified percentage of my funds, and my heirs won't be hit for a tax on their withdrawals from the Roth when I'm gone. Was this guy off base, or did he have some ax to grind? Incidentally, I'm now 81 and happily retired.

WHAT HARRY SAYS: He was off base. I don't believe he had an ax to grind. Roths and IRAs both have the same investment opportunities. Sure, paying taxes at any time reduces your available income, but there is every indication that future income taxes will be higher, not lower. Furthermore, even with identical tax rates and investments, a Roth will be ahead. It is very easy to be glib on a radio program to get your attention. Too often, however, the performers are ill-informed. Just be careful not to act rashly.


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