Fiction: The best type of IRA is a Traditional IRA because contributions are tax-free.

Fact: It is smart to utilize IRAs for your retirement savings, but the choice between a Traditional IRA, in which contributions are generally made pretax and future distributions are taxed, and a Roth IRA, in which contributions are made post-tax and future distributions are tax-free, is one that requires thought.

In assessing whether you want to pay taxes now or later, ask yourself if you think your tax rates will be lower when you retire than they are now. That's just a start, though. There are unique features and benefits to each type of account, but there are also rules that govern when and how you can access your money. You should consult with a financial professional about which option makes sense for you.


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