Retirement Savings Plans

Retirement Savings Plans

Since the basic difference between a Roth IRA and a Traditional IRA is being taxed on your income now (Roth IRA), or taxed in retirement (after age 59.5; Traditional IRA), one question you want to consider is the following: “Do you expect your tax bracket to be higher now, or in retirement?”

For most people just starting out in their careers and therefore making lower wages than they expect to in retirement (not always the case, since your income might go down as you may need less to live on in retirement), a Roth IRA often makes sense as the place to start investing.

There are other nice benefits of a Roth IRA, such as being able to pull contributions out at any time for any reason (“contributions” meaning any money you put in over the years, as opposed to “earnings,” which is any extra money that accumulates when your investments (hopefully) increase in value), and using up to $10,000 of earnings for a first-time home purchase.


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