Compare a traditional (pre-tax) IRA/401(k) versus a Roth. When does each win?

How to answer

Traditional contributions are pre-tax and grow tax-deferred; you pay ordinary income tax on withdrawal. Roth contributions are after-tax and grow tax-free, with qualified withdrawals untaxed. The core decision is your tax rate now versus in retirement: traditional wins if you expect a lower rate later (high-earner today, lower bracket in retirement), Roth wins if you expect a higher rate later (young client early in their career, or anticipating higher future rates). A Roth IRA also has no required minimum distributions for the original owner, making it powerful for estate and tax-diversification purposes.

Key idea: Pay tax now (Roth) vs. later (traditional) — compare your tax rate today vs. in retirement.