Axel Grossmann, assistant professor of finance, and Clarence Rose, professor of finance, are co-authors of an article in the September edition of the Journal of Financial Service Professionals.
Titled "Comparing the Roth IRA to the Traditional IRA: An After-tax Cash Flow Analysis," the article examines a common notion about the performance of the two types of retirement accounts: that investors with similar marginal income-tax brackets during the contribution years and the retirement years should be indifferent between the Roth and the conventional IRA, for returns are the same. Grossmann and Rose, both in Radford University's College of Business and Economics, identify specific investment situations in which each type of IRA can outperform the other in after-tax cash flows.
The nationally circulated, blind peer-reviewed journal is published by the Society of Financial Service Professionals. It features applied research in financial planning, including insurance, estates, retirement, investments, taxes, health care, economics, ethics and more.