The problem with conventional wisdom is just that — it’s conventional. Some situations fall outside the conventions and it is just these situations that Peter J. Melcher, J.D., LL.M., M.B.A, highlights in describing how taxable investments may be a better choice than contributions to an IRA or a 401(k) that doesn’t feature employer-matching funds. Taxpayers who are now in lower marginal income tax brackets and who expect to be in a higher tax bracket when distributions are made are the exception to that “conventional” wisdom, he notes.
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This story is from the CCH’s monthly Focus on Tax newsletter, which provides advise and guidance on federal and state tax issues for tax and accounting professionals.
Read this article from CCH’s Journal of Taxation of Financial Products.