<p>Both the <strong>Roth IRA</strong> and <strong>Traditional IRA</strong> allow your investments to grow tax-advantaged, but they differ fundamentally on when you get the tax break.</p><h2>Traditional IRA</h2><ul><li>Contributions may be <strong>tax-deductible</strong> (depending on income and workplace plan)</li><li>Growth is <strong>tax-deferred</strong> β€” no taxes while money grows</li><li>Withdrawals in retirement are taxed as <strong>ordinary income</strong></li><li>Required Minimum Distributions (RMDs) begin at age 73</li></ul><h2>Roth IRA</h2><ul><li>Contributions are made with <strong>after-tax dollars</strong> β€” no deduction</li><li>Growth is <strong>tax-free</strong></li><li>Qualified withdrawals in retirement are <strong>completely tax-free</strong></li><li>No RMDs during the owner's lifetime</li></ul><h2>2024 Contribution Limits (Both)</h2><p>$7,000 per year ($8,000 if age 50 or older). You can contribute to both if combined total does not exceed the limit.</p><h2>Roth IRA Income Limits for 2024</h2><ul><li>Single: Phase-out begins at $146,000, ineligible above $161,000</li><li>MFJ: Phase-out begins at $230,000, ineligible above $240,000</li></ul><h2>Which Should You Choose?</h2><p>If you expect to be in a <strong>higher tax bracket in retirement</strong>, Roth wins. If you expect a <strong>lower bracket</strong>, Traditional wins. Young earners generally benefit more from Roth; higher earners often prefer Traditional for the immediate deduction.</p><p><em>Source: IRS Publication 590-A; IRS Publication 590-B</em></p>