Traditional or Roth: choosing a retirement account

With a Traditional IRA, your contributions may be tax deductible now, and you pay tax when you take the money out in retirement. With a Roth IRA, you contribute money that has already been taxed, and qualified withdrawals are tax free.

If you expect your tax rate to be higher in retirement, a Roth may suit you. If you expect it to be lower, a Traditional account may. Many people hold both, which gives them flexibility later.

Both types have annual contribution limits set by tax law. Your account shows how much room you have left this year, and you can automate monthly contributions so you never miss one.