Personal Investing -- Tax-Free Retirement Plans Are Not Created Equal — The Roth IRA Is Prefrerred

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I'm starting a new series on investing that I can share with my extended family members, most of whom have Schwab accounts but little understanding about investing.

Anything I write here is meant only for my extended family members and no other readers. It is a starting point for discussion among the family members. Nothing is written in stone. These posts will be updated as conditions change. They will eventually be collected and linked under the "Personal Investing" tab at the top of the blog. 

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Tax-Free Retirement Plans Are Not Created Equal

In fact, calling them tax-free is a mistake. They are tax-deferred. My mistake. I should have said "tax-deferred" but this brings up a nice point.

I can't think of many financial facts of life that will hurt your portfolio more than paying taxes. 

I can't say it often enough: taking the IRA tax credit at the front end is inconsequential compared to the taxes you will pay at the back end  — the traditional IRA. Traditional IRA RMDs are almost “criminal.” The Roth IRA has no RMDs.

Forget about the tax deduction on the front end (traditional IRA) and, unless I'm missing something, go with a Roth IRA. No RMDs in retirement. 

IRS FAQs.