From your comment it sounds like you are doing just what I’m suggesting. My argument wasn’t that you should completely shun the Roth accounts, just that you shouldn’t put all your retirement dollars there.

@SJ: Don’t count on there being a huge backlash. I would venture to say that there are more people in this country that don’t have Roth accounts (or if they do they don’t have any significant sum in them) than those of us who do. The backlash would be about as effective as the tea parties we saw last month. Yeah, some people will get pissed, but ultimately nothing will change because they are the minority.

I normally tell people to save a small emergency fund, then attack the debt with ALL of their money, but in this case I think you are on top of it all enough. Having your student loans paid off by 2010 is awesome. Keep it up!

As for the “reckless assumption” there would be a large backlash if that happened; lotsa peeps would be slightly miffed. If roth IRA’s were taxed I’m sure it would be at a lower rate than income / trad/ 401k (in order to pacify votes =) )

The one case to worry about would be things as removing income tax (opps) but that seems unlikely.

Also, da Ninja is contributing to both, taxed no and later, so good hedge. I admit I’m not doing both irght now; only b/c my present marginal income tax rates are way too low =D

I will admit if I were in your case I would normally personally try to minimize the student debt first; larger guaranteed returns but everything is on sale now lol

1) It psychologically reinforces the discipline and importance of saving for retirement. I have put the Roth at the top of my “to-do” list each year and don’t want to leave that box unchecked.

2) The stock market has returned between a 10%-12% rate of return over its lifetime and that return is much higher than the 7% interest I pay on my school loan. Unfortunately with the Roth, you can’t make up for lost time and just contribute extra the following year. You get maxed out at $5K a year and I don’t want to miss the first two or three years of contributions while I pay off my loan…the earlier the contribution the richer you’ll be.

3) I’m paying down my school loan pretty aggressively. I plan to have it knocked out by the end of 2010. If I was keeping my debt around for the next 20 years I would definitely consider holding back on the Roth IRA

Hope that clarifies my personal reasons for contributing. I know it’s not for everyone, but it makes me happy and gives me a peace of mind

@ BillyOceansEleven - Really man? “Reckless assumption”? I never said I trust the government, but I can tell you I refuse to live in fear. You’re right the government may look for ways to get more money from us, and the Roth IRA might become one of those ways, but I absolutely refuse to not invest in a currently great deal out of fear that Uncle Sam “might” change it’s policy. I’m like you, I contribute to my Roth IRA and my 401K. Even if the fed sweeps in and takes more from our retirement accounts i’ll still be glad I saved it anyways. What else am I going to do? Put it under my mattress for the next 50 years. I guess we will see what happens

If you doubt this is a real possibility, consider all the things we have seen in the last six months and whether we ever thought before that those things could ever happen (bank bailouts, “stimulus” bills, auto bailouts, etc).

I’m not saying you should never contribute to a Roth account (I have one as well), however I do think it is wise to hedge your bets some by saving in traditional tax-deferred vehicles as well. At least on my traditional 401k contributions I have realized an immediate tax savings, while with the Roth I only have a promise of tax savings in the future.