IRA

Traditional IRA, Roth IRA. Which one is right for me?
With IRAs, you can choose to pay taxes either while you’re saving (Roth) or when you are withdrawing your savings (Traditional).

Traditional IRA

Tax breaks today + money for tomorrow!

One of the big advantages of a Traditional IRA is that your money grows tax deferred. You won’t get taxed on your retirement savings until you start withdrawing the money, then you’ll pay taxes on the income just like you would on any other type of income. Not paying taxes up front means more money in your account earning interest. You’ll also be taking advantage of compounding, which basically means that even your interest will earn interest because it’s automatically reinvested for you. What does that look like in real life? Saving the money, you would have spent on one fancy coffee today can mean a whole week of fancy coffee in the future.

ROTH IRA

Flexibility + tax-free withdrawals!

Because you pay taxes on your contributions with a Roth IRA, you don’t have to pay taxes when you withdraw your money later. That can be a nice penny when you’re retired. Another advantage of a Roth IRA is that you can withdraw your funds without penalty at any time. That means you could use the money for pre-retirement needs like purchasing a house or covering college expenses. You also have the option to not withdraw funds until you’re ready or even skip withdrawing at all so you can leave the money to your heirs.

Overview

TRADITIONAL IRA
Save for retirement with tax-deductible contributions.
ROTH IRA
Make withdrawals in retirement without being taxed. 
Minimum deposit: $5.00
Your contributions may be fully or partially tax-deductible1
Earnings aren’t taxed until you withdraw
Tax penalties may apply if you withdraw early2
Minimum deposit: $5.00
Your contributions may be fully or partially tax-deductible1
Earnings aren’t taxed until you withdraw
Tax penalties may apply if you withdraw early2
Avoid paying taxes now on the money you’re saving for retirement and take advantage of decades of compounding interest! This may be the right choice if you are not eligible for a Roth IRA or if you expect to be in a lower tax bracket in retirement.By taking a pay now, save later approach you’ll have fewer taxes to worry about during retirement or whenever you choose to use your savings. This may be right for you if you expect to be in a higher tax bracket when you retire. Note: Roth IRAs allow withdrawals without penalties.

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