Contributing to an IRA is one of THE BEST ways to save for retirement. In this video, I go over why you would want to put money in an IRA and the differences between the ROTH and Traditional IRA.

Read about the salary cap rules on traditional IRA contributions here:

My recording setup (btw some of these are Amazon affiliate links):
Lighting: Woods Clamp lighting (I use 2 of these)
Camera: iPhone 11
Blue Snowball mic (on screen capture videos) –
Recording software: Quicktime
Editing software: Adobe Premiere Pro and Adobe After Effects

If you’re interested in other finance video topics, check out some of these:

What is a 401k?
What is going on with Gamestop?
Short Ladder Attack on GameStop stock explained

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LEARN MORE ABOUT: IRA Accounts

INVESTING IN A GOLD IRA: Gold IRA Account

INVESTING IN A SILVER IRA: Silver IRA Account

REVEALED: Best Gold Backed IRA

When it comes to retirement savings, many people turn to Individual Retirement Accounts (IRAs) as a way to save for the future. There are two main types of IRAs: Roth IRAs and Traditional IRAs. While both have the same annual contribution limit and require the same forms and deadlines for contributions, there are some key differences between the two.

The main difference between a Roth IRA and a Traditional IRA is how they are taxed. With a Traditional IRA, contributions are typically tax-deductible, meaning you can reduce your taxable income by the amount you contribute. Any earnings in the account grow tax-deferred, meaning you don’t pay taxes on them until you withdraw the money in retirement. However, when you do make withdrawals, they are taxed as ordinary income.

On the other hand, contributions to a Roth IRA are made with after-tax dollars, so you don’t get a tax deduction when you make contributions. However, the earnings in the account grow tax-free and qualified withdrawals in retirement are not taxed at all.

Another key difference is the rules around withdrawals. With a Traditional IRA, you are required to start taking minimum distributions by age 72, regardless of whether you actually need the money. Failure to do so can result in a hefty penalty. With a Roth IRA, there are no required minimum distributions, so you can leave the money in the account to continue growing for as long as you like.

There are also differences in who can contribute to each type of IRA. Anyone with earned income can contribute to a Traditional IRA, but there are income limits for contributing to a Roth IRA. For 2021, the ability to contribute to a Roth IRA begins to phase out for single filers with modified adjusted gross incomes of $125,000 and ends completely at $140,000. For married filing jointly, the phase-out begins at $198,000 and ends at $208,000.

When it comes to choosing between a Roth IRA and a Traditional IRA, it really depends on your individual financial situation and goals. With a Traditional IRA, you get the immediate tax benefit of a deduction, but you’ll have to pay taxes on the money when you withdraw it in retirement. With a Roth IRA, you don’t get the tax deduction now, but you can make tax-free withdrawals in retirement.

Ultimately, the decision will depend on your current tax bracket, expected future tax bracket, and financial goals. It’s always a good idea to consult with a financial advisor to determine which type of IRA is best for your individual circumstances.