There are two types of IRA’s, traditional and Roth. The primary difference between a traditional and a Roth IRA is the timing of when you pay income tax on the money in the account. With a traditional IRA, although you pay income tax on the withdrawals, you may be able to deduct the amount of your contributions in the year you make the withdrawal, which could provide a nice up-front tax break. For a Roth IRA, you pay taxes on the money before you add it to the IRA — which means that withdrawals from the IRA could be tax-free (they must be qualified withdrawals).

To learn what a qualified withdrawal is and to learn more about each of these IRA’s read the full article from The Motley Fool.

Courtesy of
Fool.com
Should I Get a Roth IRA or a Traditional IRA?
Gaby Lapera (TMFCaffeine)
Apr 9, 2017 at 12:24PM