Well… I don’t agree with that article. I’ll try to break down some reasons why:
- The first few arguments he makes in favor of the Traditional tax break assume high income earners who retire early then pull out very small amounts for the rest of their lives. In this case (assuming tax rates don’t increase in the future), yes, Traditional is better. But I think that “earn a lot now, spend a little later” is pretty uncommon. Also, I don’t like relying on tax rates/laws staying the same in the future, which is why I prefer Roth.
- He then attempts to make an argument why a taxable brokerage account is just as good as a Roth IRA. This is nonsense. He says things like “At these income levels, a brokerage account effectively has a 0% tax rate for stocks, much like a Roth”. While capital gains are taxed at zero ONLY IF your income is less than $39,375. That’s just ONE FEDERAL tax. Those investments in your brokerage account also kick off taxable dividends every year, plus many states tax capital gains just like any other income (such as CA where I live) so you’re responsible for the full tax on that gain no matter what. Suggesting to prioritize a brokerage account ahead of a Roth IRA because for some individuals in the future one tax might be zero is ridiculous.
- He also says, “The brokerage account also has the advantage of being able to harvest capital losses”. Harvesting losses is a way to reduce taxes on capital gains… i.e. gains you would NEVER EVER BE TAXED ON if they were in a Roth IRA. Suggesting to put money into a brokerage account so you can LOSE money, “harvest” that loss, so you can reduce tax somewhere else… instead of just never paying tax. Not a great strategy.
- He ignores what I think is a relatively common scenario of pulling out big amounts in retirement. Say you want to buy a house, you can take $500K out of your Roth IRA and put it right into a house with zero tax. If that money is in Traditional status (or taxable brokerage account) that $500K is gonna get taxed, likely heavily since it’s such a big amount.
- For low income earners, he ignores the low income Roth IRA tax credit which gives you a tax break now AND a tax free growth forever. i.e. the benefits of Traditional AND Roth. So suggesting a low income person doesn’t do Roth is borderline offensive.
ANYWAY, broad strokes this is more of an academic debate, and one that I think he is making to cause controversy to get clicks or whatever. As always, getting the exact Roth vs Traditional choice right doesn’t matter a lot. What matters a lot is spending less than you make and investing the difference. Even if you do that all in a taxable brokerage account, you will build a lot of wealth. 
