Differences between Traditional IRA and Roth IRA

by | Mar 28, 2024 | Simple IRA | 13 comments

Differences between Traditional IRA and Roth IRA




En este video encontraremos las
Diferencias entre una los dos tipis de cuentas para que así puedas elegir la ideal para ti desde el principio.

fuente: www.IRS.gov

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*La información proveída aquí es con fines educativos y no representa ninguna recomendación…(read more)


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Individual Retirement Accounts (IRAs) are popular retirement savings options in the United States that offer tax advantages to individuals looking to save for their golden years. Two common types of IRAs are the Traditional IRA and the Roth IRA. While both types of IRAs offer tax advantages, there are key differences between the two that individuals should consider when choosing which one is right for them.

One of the main differences between a Traditional IRA and a Roth IRA is how contributions are taxed. With a Traditional IRA, contributions are typically made with pre-tax dollars, meaning individuals can deduct the amount of their contribution from their taxable income. This can result in immediate tax savings for the individual. However, when funds are withdrawn from a Traditional IRA during retirement, they are subject to income tax.

On the other hand, contributions to a Roth IRA are made with after-tax dollars, meaning individuals do not receive a tax deduction for their contributions. However, withdrawals from a Roth IRA during retirement are tax-free, as long as certain requirements are met. This can be advantageous for individuals who anticipate being in a higher tax bracket during retirement or who want to enjoy tax-free withdrawals in their later years.

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Another key difference between a Traditional IRA and a Roth IRA is how they are treated in terms of required minimum distributions (RMDs). With a Traditional IRA, individuals are required to start taking withdrawals once they reach a certain age, currently set at 72 years old. These withdrawals are subject to income tax. In contrast, Roth IRAs do not have RMDs during the account holder’s lifetime, allowing the funds to continue growing tax-free for as long as they wish.

Additionally, there are eligibility requirements for both types of IRAs. Anyone with earned income can contribute to a Traditional IRA, regardless of income level. However, the ability to contribute to a Roth IRA is subject to income limits. For 2021, individuals with a modified adjusted gross income (MAGI) of $140,000 or more are not eligible to contribute to a Roth IRA, while for married couples filing jointly, the limit is $208,000.

In conclusion, Traditional IRAs and Roth IRAs both offer tax advantages for retirement savings, but they differ in how contributions are taxed, how withdrawals are treated, and eligibility requirements. Individuals should carefully consider their own financial situation, tax bracket, and retirement goals when deciding which type of IRA is best for them. Consulting with a financial advisor can also be helpful in making an informed decision about saving for retirement with an IRA.

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13 Comments

  1. @anaalvarez-ck9xn

    Gracias gracias por tus aportes. Maravillosa explicacion

  2. @israelvicente6323

    Gracias por la información. Estaba buscando información sobre IUL y me encontré con videos. Saludos y gracias.

  3. @marcoaguirre8610

    Para una persona de 47 años, que es mejor ? Roth IRA o 401k Roth ?

  4. @douglasortega13

    Una pregunta, cual es el limite anual de contribucion para una tradicional?

  5. @mfaucf

    Buenas noches. Donde recomienda sacar la cuenta ROTH ira o IRA ?

  6. @williamparedes7667

    Mi edtimada amiga gracias x si information pero como puedo abrir o como pudo hacer para sacar Roth IRA o tengo q ir a un banco para q me acusen o como puedo hacer

  7. @irenedd6977

    Hola Teresita! Me gustaria habrir mi cuenta ROTH IRA . En que indices me recomiendas para invertir el dinero?

  8. @joseventura2299

    Osea es ahorrar e invertir para el retiro i al final las ganancias no pagar impuestos otra pregunta si yo depósito la máxima cantidad tengo que declararla en mis taxes también e aprendido en este video que el dinero que va a esa cuenta ya se an pagado impuestos lo único que veo es que puedo ahorrar para mí retiro generar ganancia ino pagar impuestos

  9. @javierpalmas3044

    muy buena informacion gracias…ya abri mi cuenta ROTH IRA pero a hora tengo miedo invertir i perder ,,,,

  10. @noemivaldivia5493

    Buen video. Te sabes expresar bien y claro. Voy a estar viendo tus otros vídeos. Me gustaría saber si con el Roth IRA tienes que reportar esa información en los impuestos?

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