Federal income taxation of investment growth and dividends is deferred until the money is withdrawn. Withdrawals are taxed as additional ordinary income when received. With a Roth IRA, the annual contribution limits are essentially the same as for a Traditional IRA, but contributions are not deductible. All dividends and investment growth in the account accumulate tax-free. Also, unlike with a Traditional IRA, you can continue to contribute to your Roth IRA after reaching age 70 as long as you have earned income and there is no requirement that you begin taking withdrawals at that time.
Traditional IRAs offer the advantage of tax-deductibility .
In other words, you realize tax savings up front. Roth IRAs offer you a tax-break when you begin making qualified withdrawals. Qualified withdrawals are tax-free, giving you a break at the end of the life of your account. Minimum withdrawals not required at or after age 70 If you are not sure between a Traditional and Roth IRAs, use our IRA Calculator to help you decide. Also, please be sure to consult your tax adviser for advice on which IRA fits your needs.