So, what is better? Traditional vs Roth IRA, what will fit you better?

To answer that we have to look at, what is a regular IRA? A traditional IRA works like this, you put money into it, write it off on your taxes and then when you pull money out from it you will have to pay for the taxes that you postponed when you where younger.

Roth IRAs are different. You don’t write off any of the money that you invest into a Roth IRA.

But you do not have to pay any taxes when you take it out of your account.

It basically depends on what you expect to happen with taxes. If you are 30 now and expect to be in a much higher tax bracket when you are 60 then putting money into a Roth IRA makes more sense. On the other hand if you think that your taxes will go down when you retire a traditional IRA may work better for you.

One other important this is how much freedom you want in the future. A traditional IRA makes investors start taking out a specific amount every year after the age 70.5. The Roth IRA account rules on the other hand let you make the decision of how much you can take out.

If you want the freedom to be able to take out as much or as little from your IRA in the future, then a Roth IRA may work better.

Needless to say it really depends on each situation. Some people might be better off with a traditional IRA, others may be better off with a Roth IRA.