What is the difference between Traditional IRA retirement accounts and the Roth IRA retirement accounts?
Traditional IRA retirement accounts and a Roth IRA retirement accounts are great ways to save for retirement, but there are very different financial outcomes for these retirement accounts. A traditional IRA retirement account allows for contributions that may be deducted from your taxes. All the earnings are tax-deferred until you begin withdrawing funds from the retirement account at age 59 ½ (or mandatory 70 ½). At which point, all the distributions are taxed at your ordinary income rate. With a Roth IRA retirement account, the contributions are not tax deductible. Roth IRA retirement accounts are only available to individuals making $95,000 or married couples making a combined income of $150,000. When you reach retirement age, you can withdraw funds from the retirement account, tax-free.
