What's the difference between a Roth and a traditional IRA?

Answer by  altos (224)

Anyone can contribute to a Traditional IRA, only those that make less than a certain amount (something like $95k for singles, and $150 for married couples) can contribute to a Roth IRA.

Answer by  notorious (249)

There are limitations as to how much you can contribute to a Roth (it changes but is around $5k), but there aren't limitations to how much you fund your traditional IRA with.

Answer by  hefito (226)

No income tax deduction for what you contribute to a Roth IRA, but you do get an income tax deduction for the money you put into a traditional IRA.

Answer by  kph0329 (637)

With a traditional IRA you pay taxes when you withdraw funds, and with a Roth you pay the taxes up front. With a Roth IRA there is no mandatory age for withdrawal. Roth IRA's, have an income restriction of $95,000 for singles and $150,000 for married couples, and with the traditional IRA there is no income restriction.

Answer by  manny (185)

The biggest difference is that traditional IRAs are tax deductible, but Roth IRAs are not tax deductible.

Answer by  shalom (271)

Lots. A traditional IRA allows for tax deductible contributions while a Roth IRA does not. Taxes are paid when you pull money out of a Traditional IRA whereas taxes are not assessed when money is pulled out of a Roth IRA.

Answer by  AEF (519)

The primary difference between a Roth and a traditional IRA is that contributions to a Roth IRA are not tax-deferred. The most significant result is that you can make tax free withdrawals up to the amount of direct contribution. There are many other complexities and advantages. You should speak to a financial professional for more details.