Roth vs. Traditional IRA: Which One Is Right for You?

The difference between a Roth and a Traditional IRA comes down to one question: when do you want to pay taxes?

Both are retirement accounts with powerful tax advantages. The difference is timing.

Traditional IRA

• Contributions may be tax-deductible now — you lower this year’s taxable income.

• Your money grows tax-deferred.

• You pay ordinary income tax when you withdraw in retirement.

Roth IRA

• Contributions are made with after-tax money — no deduction today.

• Growth and qualified withdrawals are completely tax-free.

• Great if you expect to be in a higher tax bracket later, or you are young.

Young and early in your career? The Roth’s decades of tax-free growth are hard to beat.

Regla general: si crees que pagarás más impuestos en el futuro, el Roth suele ganar.

Educational content, not financial advice. Talk to a licensed professional about your situation.