Roth ira vs traditional ira

1. You get tax-free growth

One of the benefits of a Roth IRA is that the money you invest in a Roth IRA grows tax-free, so you don’t have to worry about reporting investment earnings—the money your money makes—when you file your taxes.

By comparison, if you invest in a nonretirement account, your earnings are subject to federal, state, and local taxes each year.

2. You can take tax-free withdrawals in retirement

If you’re age 59½ or older and have owned your account for at least 5 years,¹ you can withdraw money—contributions plus earnings—from your Roth IRA without paying any penalties or taxes.
So even if you take a lump-sum withdrawal in retirement, your retirement income won’t be affected.

How does a roth ira grow

This is a valuable benefit because your income affects how much you pay in taxes—including the taxation of Social Security benefits—as well as Medicare Parts B and D premiums.

3. You decide when, if, and how to take withdrawals

Unlike a traditional IRA, a Roth IRA has no lifetime required minimum distribution.

You’re eligible for tax-free and penalty-f

why should i open a roth ira account

why should i not open a roth ira