A Traditional IRA is a tax-advantaged retirement account that allows you to contribute pre-tax dollars. Contribution to Traditional IRA is tax-deductible, which can reduce your taxable income for the year. You can invest up to $5,500 a year in a Traditional IRA account (or up to $6,500 if you are 50 or older).

The earnings within a Traditional IRA grow tax-deferred, meaning you won’t owe taxes on them until your withdrawal the funds in retirement. You are eligible for penalty -free withdrawals from your Traditional IRA once you are age 59 ½ or older. Once you reach 70 ½ you must take a required minimum distribution (RMD) every year. At 70 1/2, you are also no longer eligible to contribute to the IRA.

Always consult a certified financial planner.

Great for long-term savings or retirement goals.

A Roth IRA is funded with after-tax dollars. Although contributions to a Roth IRA are not tax-deductible, the earnings grow tax-free. One of the key benefits of a Roth IRA is that qualified withdrawals in retirement are tax-free. Additionally, Roth IRAs do not have required minimum distributions (RMDs) during the account owner’s lifetime, making them a flexible retirement savings option.

Always consult a certified financial planner.