What is the difference between a Roth IRA and a traditional IRA?

The main difference between a Roth IRA and a traditional IRA is how and when you get a tax break. Contributions to traditional IRAs are tax-deductible, but withdrawals in retirement are taxable as income. In comparison, contributions to Roth IRAs are not tax-deductible, but the withdrawals in retirement are tax-free.

What are the advantages and disadvantages of a traditional IRA?

Traditional IRAs have more advantages than disadvantages. Moreover, the disadvantages can be largely avoided through careful planning and fiscal discipline. The pros and cons provided below illustrate the primary things you should consider. In addition to the traditional structure, IRAs are available in a Roth structure.

What are the pros and cons of a Roth IRA?

The pros and cons provided below illustrate the primary things you should consider. In addition to the traditional structure, IRAs are available in a Roth structure. As discussed previously, with a traditional IRA, your contributions are generally tax-deductible in the year in which they are made.