Traditional IRA vs. Roth IRA
Posted by Gabe Graumann on November 21, 2007
No doubt you’ve heard of an IRA. The real question is whether or not you know which type of IRA is right for you to invest in. Looking at the information listed below should help you make a clear choice.
Traditional IRA
* Qualified contributions are tax deductible when made, and then taxes are paid on the withdrawals once it has matured (59 and 1/2 years old).
* A better plan if you believe your current tax rate is higher than the tax rate you will have at retirement age.
Roth IRAs
* No tax deduction on contributions.
* No taxes on withdrawals once the account has matured (59 and 1/2).
* Some withdrawals after 5-years are penalty free.
* There is an income cap $160,000 for couples who are “married filing jointly”, and less for singles and married couples filing separately.
As the vast majority of couples make less than the income cap, the Roth IRA carries more long-term benefits than the Traditional IRA. The biggest advantage are the tax-free withdrawals at maturity, meaning all that interest you accumulated over 20 or 30 years comes to you tax free! You can read a lot more on the subject of IRAs by reading the following article at Investopedia.
Money Talk With Gabe 
moneywinks said
I prefer the Roth IRA anyday over the traditional- I can’t imagine what taxes will be in 30 years.