A chart explaining the differences between a traditional and a Roth Individual Retirement Account.
| Feature: | Traditional: | Roth: |
|---|---|---|
Contributions | Generally contribute pretax dollars | Contribute after-tax dollars |
Withdrawals | Pay income tax on withdrawals | Generally take withdrawals tax free* |
Best option if | Current tax rate is greater than tax rate in retirement | Tax rate in retirement is greater than current tax rate |