Which is better ROTH IRA or Traditional IRA?
The Roth IRA is almost always the better choice. You contribute to a Roth IRA with post-tax dollars. That means you do not get a tax deduction for the contribution. However, all the money, including earnings, can be withdrawn tax-free in retirement. And, taxes are likely to be higher in the future. Contributions to traditional IRAs are made with pre-tax dollars. You get a tax deduction for contributions you make to a traditional IRA, but when you withdraw later, you pay taxes on everything – contributions and earnings. Other benefits of a Roth – you can withdraw your contributions (not earnings) at any time without paying taxes or penalties. So, the Roth IRA can double as your emergency account if you don’t have enough money to fund both. There are no mandatory distributions required of a Roth. With a traditional IRA, you must begin withdrawals no later than the year following the year in which you become age 70 1/2. There is no age limit for contributions to a Roth. With a traditional
