Is traditional ira better for high-income earners?

A Roth IRA or 401 (k) is the most sensible if you're sure you'll have a higher income when you retire than you do now. If you expect your income (and your tax rate) to be higher today and lower when you retire, a traditional IRA or 401 (k) is probably the best option. You save the most if you don't have pre-existing traditional IRA balances that need to be included in your tax bill or if your employer's qualified plan allows the renewal of deductible IRA balances. Your actions and circumstances are identical to those of the first situation, except that you also have a traditional IRA reinvestment account that was fully funded by deductible contributions.

While the Roth IRA is known for its strict income limits that exclude people with higher incomes, the traditional IRA doesn't have to worry about those restrictions. With a clandestine Roth IRA, a person makes a non-deductible contribution to a traditional IRA and then converts that account into a Roth IRA. A clandestine Roth IRA is not a type of retirement account, but rather a strategy for converting funds from a traditional IRA or 401 (k) into a Roth IRA. Some advisors also consider the so-called clandestine Roth IRA to be another way of guaranteeing the tax features offered by Roth accounts.

Under the prorated rule, IRA account conversions are taxed in proportion to the amount of taxable contributions from all of your IRA balances.