Traditional IRA/401k is the most reasonable retirement plan

Based on the most helpful WSO content, your perspective has merit, but it's not a one-size-fits-all answer. Here's the breakdown:

1. Traditional IRA/401k Advantages:

   • In high-tax environments like NYC, contributing to a Traditional 401k/IRA provides immediate tax savings, which can be significant given the high state and local taxes.
   • If you plan to retire in a tax-friendly state like Florida, where there’s no state income tax, you could withdraw your funds at a lower effective tax rate, making the Traditional route more appealing.

2. Roth IRA/401k Considerations:

   • Roth contributions are made with after-tax dollars, which can feel burdensome in a high-tax state like NYC.
   • However, Roth accounts offer tax-free withdrawals in retirement, which can be advantageous if federal tax rates increase significantly in the future or if you expect to have substantial income in retirement.

3. Key Factors to Weigh:

   • Current vs. Future Tax Rates: If you believe your tax rate in retirement will be lower (due to moving to a tax haven or having a lower income), the Traditional route makes more sense. Conversely, if you expect higher tax rates in the future, Roth could be better.
   • Liquidity and Flexibility: Roth accounts don’t require mandatory withdrawals (RMDs), which can be beneficial for estate planning or if you want to delay withdrawals.
   • Diversification: Splitting contributions between Roth and Traditional accounts (e.g., 50/50) can hedge against uncertainty in future tax policies.

4. NYC-Specific Context:

   • For IB analysts in NYC, the immediate tax relief from Traditional contributions can be a significant advantage, especially given the high cost of living.
   • Roth contributions might feel less practical unless you’re confident about future tax hikes or have a long-term strategy that prioritizes tax-free growth.

In summary, your argument for Traditional IRA/401k is strong, especially for those planning to retire in tax-friendly states. However, Roth accounts still have their place, particularly for those who value tax-free growth and flexibility. A balanced approach or a tailored strategy based on individual circumstances is often the best advice.