Understanding Traditional IRAs

Traditional IRAs offer a significant upfront tax advantage. Contributions are typically tax-deductible, meaning you reduce your taxable income for the year you contribute. This can lower your current tax bill. However, the catch is that you’ll pay income taxes on your withdrawals in retirement. This means your tax burden is deferred until you start taking distributions, potentially facing a higher tax bracket than you did when you made the contributions.

Roth IRAs: Tax-Free Growth and Withdrawals

Roth IRAs work in the opposite way. Your contributions aren’t tax-deductible, meaning you don’t get an immediate tax break. However, qualified