We are a family of four. Two adults and two children (minors). I (Arther) work - currently under the income bracket of 28%. I plan to retire in about three years from now probably under the same income bracket (might move out of USA). Have a question on whether to go in for Trad IRA or Roth IRA this year (2001) onwards. I already have a Roth for the yrs 1999 & 2000. Very interested to hear from you.

If you meet the requirements to take the deduction for the transitional IRA contribution and can afford not to take it, then go Roth.

If you are not eligible for the deductions for the traditional IRA contribution, then go Roth.

Reason- once the distributions are qualified, you never pay taxes or penalties on Roth IRA distributions.

For traditional IRA, you will always pay taxes, on at least the income. If deductions were taken for the contributions, then the total distributions is taxed.

Thank you so much for your answer. This really helped me work out the final decision. Hope this has also benefitted some others with a similar situtaion. Thanks again.