IRAs: Traditional vs. Roth
Traditional IRA
A traditional IRA allows you to contribute pretax earnings up to a maximum yearly allowance and to defer income taxes until the money is withdrawn after age 59 1/2.
Roth IRA
A Roth IRA allows you to contribute after-tax earnings up to a maximum yearly allowance and pay no taxes on withdrawals after age 59 1/2.
The Difference between a Roth IRA and Traditional IRA
With the Roth IRA you pay your taxes now while you are bringing home a regular paycheck.
Traditional IRA contributions are typically deductible. However, you will pay taxes on the contributions and the money gained on your investment when you withdraw it during retirement.
Both the Roth IRA and the traditional IRA have advantages. We can help discover the best option for you.
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