Roth vs Traditional IRA
Finance — Honest comparison to help you decide
Roth IRA
- ✓ Tax-free withdrawals in retirement
- ✓ No required minimum distributions
- ✓ Contribute after-tax dollars
- ✓ Best if you expect higher tax bracket in retirement
- ✓ Withdraw contributions anytime penalty-free
VS
Traditional IRA
- ✓ Tax deduction now (reduces current taxes)
- ✓ Required minimum distributions at 73
- ✓ Best if you expect lower tax bracket in retirement
- ✓ Higher contribution limits for some
- ✓ Immediate tax savings
The Verdict
Under 40 or expect higher future income: Roth. Near retirement or high current tax bracket: Traditional. Many advisors recommend having both.