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Comment by sgman | Hacker News Reader

Gains in Roth IRAs are also tax free in addition to withdrawals. This means that if you have 30 or more years until retirement, you enjoy a 30 year growth at 8% compounded tax free (based on The numbers in the article). This is why if you're young and qualify for a Roth IRA it's almost always the correct choice.

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That doesn't matter. Roth vs. Traditional is purely a bet on current vs. future tax rates.

    P = principal, 
    T_0 = current tax rate, 
    T_t = Tax rate at retirement (t years in the future). 
    r = rate of return between time 0 and t

    Roth IRA: (P * (1-T_0)) * (1+r)^t
    Traditional IRA: (P * (1+r)^t) * (1-T_t)

Which are identical save for the tax rates.

It's not quite that simple. There is other relevant weirdness in the tax code. Roths are not subject to required minimum distributions and don't count as income during retirement. That can be very useful because a lot of provisions of the tax code phase out as your income rises.

Of course, Congress could also fix that oversight by the time you make it to retirement ...

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