In a traditional IRA, you can contribute pretax dollars to the account and the money will grow tax-deferred. That means any withdrawals you make after the age of 59½ will be taxed as normal income.A Roth IRA is the inverse of this. With these accounts, your contributions are taxed and your money grows tax-free; however, after the age of 59½, any withdrawals you make will be tax-exempt and penalty-free.