Chart: Why Traditional IRAs Beat Roth IRAs
One question people face as they plan for retirement is whether to use a traditional IRA or a Roth IRA. There are advantages to both, but there's one important reason a traditional IRA will tend to work best for the average American: taxes.
Traditional and Roth IRAs are investment accounts that the government has designed to encourage people to save for retirement. They do so by acting as a legal tax shelter for money contributed to them.
In the case of a traditional IRA, each eligible person can contribute up to $5,500 a year, or $6,500 if you're 50 or older. You can then claim your contribution as a deduction on your income statement, thereby reducing your current tax liability.
Source: Fool.com
