No way, right?! No double taxation!
Well, the chances are slim, but they technically could one day. You already paid the tax for the money you contributed, but you haven’t paid a tax on the gains that the investments make within the account. Right now the IRS allows you to withdraw the contributions AND the gains tax free after you reach age 59 1/2. However, if our country runs into SERIOUS trouble financially at some point in the future, they could change this rule. For example, Social Security benefits used to be completely tax free, but no more.
I’m a huge fan of the Roth IRA, but at the same time I think it’s a little risky to count on a benefit that you’re probably 30-40 years away from realizing. The rules could change, or you might not live that long. Personally, I put half of my retirement savings in a regular IRA and the other half in a Roth. I like to realize some of the tax savings right away to make sure I actually get it, even if it means that I’m giving up some money over the long haul.
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