I am revisiting the idea of investing in a traditional IRA instead of a Roth IRA for the tax benefits. With all the questions and uncertainty about our future, I would rather take the known benefits now which is 25% back in taxes. I decided to stop investing in my Roth this month. So far in 2012 I have put in $1,000 into my Roth, so I just opened a regular IRA and I put in $1,000. As of right now that's all I plan to do in 2012 for investments since I have so many other shorter term financial goals to make in the next few years. I'll take the $250 deduction on my taxes next spring (which will come in handy because of my husband's raise will likely produce a higher tax bill).
Why was the Roth IRA introduced? The Roth IRA, which was named after Senator William Roth of Delaware, appears to be a way the government can get their money earlier instead of waiting decades to get it. I'm guessing the option to invest in a Roth IRA was created to benefit the government and not the people. It brings the government more tax money now and who wouldn't want money now instead of later? As I mentioned before, probably around 20% of people will die before they even get to use their retirement accounts. If their savings are all in a Roth, then they have already paid the taxes before they died. If someone who dies before retirement has their money in a traditional IRA, then they never had to pay the taxes on their money. Maybe I'll change my mind in the future, but I'm going to delay paying taxes on my retirement money for as long as possible.