It all comes down to taxes. Traditional IRAs are tax-deductible now but you pay tax when you withdraw in retirement. Roth IRAs are contributed to on a post-tax basis so you pay tax now and then take your withdrawals tax-free after you retire.
To decide ask yourself if you think your tax rate will be lower in the future or if you think the rate will be higher.
If you think you will be in a higher bracket when you retire go with the Roth
If you think you will be in a lower bracket in retirement as you live off your savings then take the tax advantage now with the Traditional.
Here is a great resource with updated tables and more details:
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About Frank Chou:
Passionate senior finance leader with over 10 years of experience implementing finance best practices for multi-billion dollar companies serving both domestic and international marketplaces in the manufacturing, logistics, distribution, and fulfillment sectors. Founder and catalyst of world-class finance teams in both rapidly scaling and established enterprises. Proven as a trusted business adviser, building successful partnerships across functions and delivering bottom-line growth through implementing best practices, eliminating waste, and optimizing cost.
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#rothira #traditionalira…(read more)
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
Which do you prefer or do you use both?
Great explanation!!!
Nice short! I have a 401k and a Roth IRA.
Great stuff. I watch several youtube videos on how to trade in the stock market but haven't made any headstart because they are either talking some gibberish or sharing their story of how they made it and I do not want to make mistakes by taking risks in my own hands.
Pre tax vs post tax . I believe both should be in everyone’s portfolio
Really cool shorts