Once upon a time, in a land now lost,
it was pretty safe to say that your tax burden would be lower in retirement, than it was while you were working.

So lo! there was created the Traditional IRA, which could be funded with pre-tax money (an adjustment on your taxes would lower your current taxable income), and you would take the funds out when your tax rate was lower. Savings on both ends!

Time marched on, and someone figured out that taxes seldom go down ... unless you're poor, and the IRA was supposed to be how you kept from being poor in retirement, right? So now you're taking money out of the IRA, getting taxed on that, and probably suddenly getting hit with income tax on your Social Security, too. Savings on the back end are now slim to none.

A Senator named Roth proposed and managed to get passed, a new kind of IRA, the Roth IRA. You put in after-tax money, but pay no income tax when you take it out (if you've met certain requirements). Since Roth distributions don't affect your taxable income, your Social Security is a whole lot less likely to be taxed, too. So, no savings on the front end, but maybe something decent on the back end. Also, if you had already had good fortune or smart planning, and didn't *need* your Roth IRA money, you don't have to take it out at all (unlike the Traditional, which you have to begin drawing somewhere around age 70.5).

If you have a Traditional IRA, it might be worth looking into converting it to a Roth. True, you would have to pay the income tax on the amount you convert, and financial planners will frown at you if you are close to retirement age (the tax you would have to pay might be more than the projected savings -- you'd have to review your specific situation to decide).

If you are at least five years from needing the retirement distributions, look seriously at the Roth.