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By diversifying, retirees can stay tax nimble, Littell explained. "You want to have accounts that have different tax consequences, because then you can adjust to different tax rates," he added.
Should taxes rise, drawing money out of a Roth keeps taxable income low. But if a retiree finds him or herself in a lower bracket, then withdrawals from a traditional IRA or 401(k) are a low-cost way to bide your time while your Roth assets continue to grow. Roths are also a good source of funds for making big-ticket purchases without getting slammed with higher, taxable income that could push you into a higher bracket for the year.
"The only time I don't recommend a Roth is if someone is in a high tax bracket and they need the tax deduction now," said John Madison, a CPA with Riverpine Services.
For young workers, a Roth is a no-brainer. The tax deduction they might receive for a traditional IRA contribution isn't worth much when they are just starting out and in a low tax bracket, said Sarenski of Blue Ocean. "I'd like to see them doing a Roth as much as they can early on," he said. "As their tax rate increases, they could switch over to the deductible IRA."
To increase the proportion of your Roth assets, you can convert a tax-deferred IRA to a Roth. Bear in mind, though, that any amount that's converted is considered taxable income. "When I did this a few years ago, I found it painful," conceded Littell of The American College.