Ever since I started saving for retirement in 1999, I’ve been a proponent of tax-deferred retirement vehicles like the 401(k) and skeptical of tax-now vehicles like the Roth IRA. Working in banking, I was already being taxed out the wazoo and had no desire to pay even more. Frankly, I wasn’t even familiar with the Roth IRA or the mega backdoor Roth IRA when I first started working.

The Roth IRA was established under the Taxpayer Relief Act of 1997 and became available to taxpayers on January 1, 1998. It was named after Senator William Roth of Delaware, a key advocate for this retirement savings vehicle.

Unlike traditional IRAs or 401(k)s, which use pre-tax contributions but require taxes on withdrawals, Roth IRAs are funded with after-tax dollars, allowing for tax-free withdrawals on qualified distributions.

Slowly Warming Up to the Roth IRA

In 1999, I had just landed my first job out

Keep reading this article on Financial Samurai.

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