Roth IRA vs Traditional IRA 📊 What's the difference — and which one is better for you?
What Is an IRA? An IRA (Individual Retirement Account) helps you save money for retirement with tax advantages. There are two main types: Roth & Traditional.
Key Difference – Taxes 💸 Traditional IRA: Pay taxes later (when you withdraw) 💸 Roth IRA: Pay taxes now, grow tax-free
Contributions 🟦 Traditional IRA: May be tax-deductible (depends on income) 🟨 Roth IRA: Not tax-deductible But Roth gives tax-free withdrawals later!
Withdrawal Rules 🔒 Traditional IRA: Penalty before age 59½ ✅ Roth IRA: Contributions can be withdrawn anytime Earnings = tax-free after 59½ & 5-year rule
Income Limits 💼 Roth IRA: Has income limits 🪙 Traditional IRA: No income limits for contributing (But deduction limits may apply)
Required Minimum Distributions (RMDs) 📉 Traditional IRA: RMDs start at age 73 📈 Roth IRA: No RMDs during your lifetime More control with Roth!
Which One’s Better? 💡 Choose Traditional IRA if you want tax savings now. 💡 Choose Roth IRA if you want tax-free income later. It depends on your age, income & goals!