Frequent readers here know the big advantages of the Roth IRA.

The Roth is non-deductible IRA that allows tax-free withdrawals at retirement, the ability to take your own "contributions" out any any time without taxes or penalties (huge benefit), and you don't need to take distributions at age 70 1/2 like your traditional IRA or 401k.

Here's another plus;  A Roth IRA can substantially reduce a retiree's tax bill.

RegisteredRep.com explains the tax reduction of the Roth IRA.

Sure, you and most of your clients recognize and appreciate the fact that after age 59 ½ distributions from Roth IRA accounts are typically tax-free. But because of the progressive nature of the tax code, that lack of taxation can provide a “1 + 1 = 3” benefit.

Say your clients are a 65-year-old couple, with the $1,000,000 they hold in IRAs as their only source of income. All other factors being equal, if they decide to withdraw $100,000 a year from those accounts, their federal income tax bill will reach about $13,000, according to the “Tax Estimator” at www.hrblock.com.

But if their million-dollar nest egg is instead made up of $800,000 in IRAs, and $200,000 in Roth IRAs, and the clients pull $80,000 from the former and $20,000 from the latter, their federal income tax liability for that year will be less than $8,300.

Withdrawing from both an IRA and a Roth IRA, then, cuts their tax bill to just over 8 percent of their income from 13 percent. Basically, their ability to tap a Roth IRA saves them $5,000 in federal taxes in just one year — almost enough to pay the cable bill.