Hello. Something I’m really struggling with as I learn more about retirement:
It’s often recommended on this sub and elsewhere to invest into traditional IRA/401k as opposed to Roth, with the justification that you’ll probably be in a lower tax bracket when you withdraw in retirement.
However in retirement, Roth withdrawals are not considered income. Traditional withdrawals are. Raising your income triggers taxes on social security benefits.
Would choosing Roth make sense for certain folks to avoid the SS tax?
Let me know if I have any of that incorrect. Asking because I’m sitting in on financial advisor meetings with my retired parents, trying to learn and to help them. They have no taste for this stuff. They are not wealthy by any means and I’m seeing them paying effectively 33% combined or more tax on trad IRA withdrawals (federal, state, and the SS tax hit combined).
Thanks!