Roth vs Traditional

[Deleted]

At this point, my DH and I are in the 10% tax bracket therefore we put our retirement funds in a Roth IRA. At what tax bracket do you think we would should switch to a traditional IRA or 401k?

[qofcc]

Definitely at 25%. At 15% it sort of depends on where your income level might be in retirement and how and when you plan to use the different accounts and also in tax planning what income might start to phase you out of certain deductions. As you reach the bridge between the 10% and 15%, you could contribute enough pre-tax to stay in the 10%, then once you're firmly in the 15% re-evaluate.

Are you at least contributing enough for each of you to get the saver's credit?

[Deleted]

Because my DH is a full time student we are unable to get the saver's credit.

[mithrin]

I believe that you can still get the saver's credit for YOUR contributions, just not DH. DH being a student only disqualifies him, not both of you (at least that's how I've done our returns!)

I still put our IRA contributions to a Roth in the 15% bracket. Our 403b contributions are tax-deferred, so I want to have a mix of Roth and non-Roth during retirement (Roth is not subject to minimum distributions, and could be cashed out in large amounts without tax consequences to fund big-ticket purchases). I also like to put money in Roth now because we can withdraw the contributions at any time w/o penalty, so in years when it's hard to decide if we can really afford to put the full 10K into IRAs, putting in Roth is the easy decision. We make the contribution now, but have the option to pull the 10K back out if really needed.

[Deleted]

mithrin, I could ave sworn I looked it up and we were ineligible for saver's credit, even with just my DH going to school but now that I am looking again I cannot find anything like that. I think I will call the IRS and see.
ETA: I just called and they agreed with you, now to amend last years taxes and start contributing to my Roth instead of my DH's.
ETA 2: I am still not eligible because we took out money in 2009 for buying our first house. I will be eligible in 2012, unless I get into grad school.