When I make investments for my retirement, virtually all of the money I set aside for the future goes into one type of account: a Roth IRA. There are three simple reasons I picked this account to hold the assets that are key to my security as a senior. Here they are. 

Adult using calculator to review financial papers.

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1. I believe my taxes will go up

A Roth IRA is an alternative to a traditional IRA. While a traditional IRA provides a tax deduction in the year contributions are made, Roth IRAs don't. However, distributions from a Roth IRA can be taken tax-free as a senior.

Although I'm paying taxes at a fairly high rate now, I believe it's inevitable my taxes will go up in the future. I think that a tax increase is likely based on historic tax rates and the current level of government debt, as well as based on the fact that I'll lose some of my most valuable deductions as a retiree, including the mortgage interest deduction I'll lose when my house is repaid.

Since I anticipate that I'll be taxed at a higher rate as a senior than I am now, I'd rather defer my tax savings until later on by using a Roth account. 

2. I don't want to worry about Social Security tax

Retirees with income above a certain threshold are taxed on their Social Security benefits.

I anticipate that my income would be above that threshold if I took distributions from a traditional IRA. That's because the income that counts for determining if Social Security benefits are taxed equals half your Social Security benefits, all taxable income (such as IRA distributions), and some non-taxable income. 

Distributions from a Roth IRA, however, are not taxable, and don't count in determining if Social Security benefits are taxed. Since I want to be able to withdraw plenty of money to live on without worrying about losing Social Security benefits to the IRS, I'm investing in a Roth IRA. That way, I can take out as much as I'd like and it won't affect my benefits at all. 

3. I don't want to have to take required minimum distributions

Finally, traditional IRAs require you to take required minimum distributions (RMDs) after the age of 72. That enables the government to finally collect tax on the money in the account.

The problem is that I don't want to withdraw funds on a schedule that's been determined by the government. I want to decide on my own when it makes sense to withdraw money, and to have the option to leave as much of the money in my Roth IRA to my children as I want. 

Ultimately, a Roth IRA is the better account for me -- it provides the flexibility I'm looking for, and I think using this account will result in lower taxes overall. This may not be the case for everyone. If you expect that your tax rate will go down as you get older and you don't mind taking RMDs, you may prefer a traditional account.

The important thing is to understand the pros and cons of each different type of retirement plan and make a fully informed decision about what's best for you.