In a nutshell, this CNBC article has three main points -
- Roth accounts may make more sense than traditional, pre-tax ones when savers believe their tax rate is lower now than it will be in retirement.
- Low historical income-tax rates and a large U.S. budget deficit make it likely tax rates will increase in the future, according to some tax policy experts.
- It may make sense to split contributions 50-50 to Roth and pre-tax accounts.
In short, experts believe that achieving diversification by saving in accounts with different tax treatments can still be a better strategy, because you can’t predict future tax rates, but you can tax-diversify, hedging your bets by dividing savings between Roth and traditional.