[Justa]

“The one downside I see to a Roth IRA is that nothing prevents Congress from changing the law in the future and making your withdrawals taxable.”

Well, they’d have to change the law and tax law to do that. Even if they did it would just elimate the ROTH, which, I believe, most politicians use themselves.

Then there’s the whole issue of Fed taxes already being paid on the money in a ROTH so it would not pass to tax them 2x. It would only apply going forward, basically eliminating ROTHs.

Yes, Congress can always ‘change the law’ which is why ROTHs are attractive. The Fed Tax is paid going in so the tax obligation is removed at that point.

But yes, a Greece-style raid is not out of the question considering the Marxists in the media and gov. Buy gold? But that can be outlawed and seized too.

[Alberta's Child]

The potential scenario I would envision is one where Roth withdrawals are not taxed on the full amount, but are treated like capital gains where the initial contributions are the cost basis and the gains are taxed.

Yes, Congress can always ‘change the law’ which is why ROTHs are attractive.

I’m thinking it’s the exact opposite. Congress can change the law in the future to make your Roth withdrawals taxable, but they really can’t go back and take away the tax deduction for a tax-deferred contribution to a traditional IRA you made years ago.

This is why I strongly advise against Roth conversions except in rare cases. You’re basically trading a “bird in the hand” (the tax break you already got) for “two in the bush” (a tax break you might get years from now).