Plan to Make Big Bucks in the Future? Use a Roth IRA Before That Happens.
Saving and investing for retirement is best done from multiple angles, using all the resources available to you. One resource everyone should take advantage of is an IRA. There are two types of IRAs: Roth and traditional. Unlike a 401(k), an IRA isn't tied to your employer and must be opened on your own, like a regular bank account.
The main difference between Roth and traditional IRAs -- and what should ultimately decide which one you contribute to -- is when you get your tax break.
With both Roth and traditional IRAs, you can contribute after-tax money, but there's a chance you can deduct your traditional IRA contributions, depending on your filing status, income, and whether or not you have a retirement plan at work. Since you get your tax break upfront with a traditional IRA, you'll owe taxes on the withdrawals in retirement, which you must begin taking at age 72 because of the required minimum distributions (RMDs).
Source Fool.com
