Whats the difference between a Traditional IRA and a Roth IRA, and what are the tax benefits of each?
Both types of IRAs are a smart choice for retirement savings. They allow you to enjoy tax advantages while saving for your future. With a Traditional IRA, investment earnings are tax-deferred1, so you pay taxes only when you withdraw funds. Plus, contributions made to your Traditional IRA may be tax deductible. (Consult your tax advisor for details.) With Roth IRAs, all withdrawals are federal income tax1 and penalty-free, including earnings – assuming you are over 59 1/2 years old and your account has been open for at least five tax years when you make your withdrawals. Unlike Traditional IRAs, contributions to Roth IRAs are never deductible. (Consult your tax advisor for details.) For more information, view the Traditional vs. Roth IRA comparison chart.
Related Questions
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