Traditional and Roth IRAs

The link below will take you to an IRS page that shows a comparison of Traditional and Roth IRAs.

Traditional and Roth IRAs

Note, there are certain differences between Traditional and Roth IRAs that are important to understand to ensure you are using these types of accounts in the most efficient way. First, the eligibility requirements for Traditional and Roth IRAs are different. In addition, Traditional IRA contributions are tax-deductible (i.e., contributions are “before-tax”), while Roth IRA contributions are non-deductible (i.e., contributions are “after-tax”). The other important difference pertains to the taxability of withdrawals. Withdrawals and distributions from Traditional IRAs are fully taxable (to the extent the contributions were tax-deductible). Withdrawals and distributions from Roth IRAs, on the other hand, are non-taxable provided they are qualified distributions.

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