I’ll start off with a disclaimer: I am not an expert in US tax law. I’m not even an American. That being said, the US retirement accounts seem to be broadly similar to what we have here in Canada, so I can give some general advice.
Unfortunately, the choice between traditional and Roth really hinges on something you can’t possibly know: your tax rate now versus your tax rate at retirement. All else being equal, if your tax rate is higher now than it will be when you are retired, then the traditional account wins. If your tax rate is higher in retirement, the Roth wins. If they are equal, the two accounts are equivalent. The typical advice that is given is that if you are currently in a low tax bracket, the Roth may be the better choice now, but if you are in a higher bracket, the traditional account is probably the better choice.
One thing that I don’t think that enough people take into consideration is that when comparing your tax rates, your marginal tax rate now is what matters (i.e. the tax rate of whatever tax bracket you are in), but in retirement the tax rate to consider is probably closer to your average tax rate. This is because you are probably getting the majority of your taxable income in retirement from your retirement accounts (the other major source of income would be Social Security, I guess), and you don’t pay your marginal rate on all of your income. This favours the traditional account, and my feeling is that it’s a significant win for the traditional account (although I’ve never seen real-world numbers one way or the other to confirm this).
Another thing to be sure of is to confirm whether your contributions to the traditional account will be tax-deductible. I’m not clear on the details but I know that in the US, at certain income levels contributions to some traditional retirement accounts are no longer tax-deductible. In that case the Roth wins handily.
One more tidbit to consider: if you are going to be contributing the maximum amount of money, and you can contribute the same amount of money to either a Roth or a traditional, the Roth probably wins. This is because if you contribute $5000 to a Roth account, the whole $5000 is yours forever (but you have already paid taxes on that $5000, so it cost you almost $7200 in pre-tax money if you are in a 30% tax bracket). If you contribute $5000 to a traditional account, you will have to pay tax on that $5000 eventually (but it only cost you $5000 pre-tax). This only matters if you’re going to max out the account, but if you are, you can effectively shelter more of your money in a Roth.
The most important thing, though, is that I really don’t think that the difference between the two is going to be all that important. I think that some people can get caught up in analysis paralysis and not make any choice, and that’s far worse than choosing the “wrong” account. Both the traditional and the Roth offer huge tax savings to you, and you won’t regret having either type of account at retirement. You will regret it if you have neither.