General education. Check current official rules and your own circumstances before acting.
An account is the container
An IRA is a retirement account. The investments held inside it are a separate choice. Opening an account does not, by itself, decide how the money will be invested.
Compare the main differences
| Feature | Roth IRA | Traditional IRA |
|---|---|---|
| Contributions | Not deductible | May be deductible, subject to rules |
| Withdrawals | Qualified distributions are tax-free | Generally taxable, except amounts attributable to after-tax basis |
| Before contributing | Check compensation and income eligibility | Check compensation and deduction eligibility |
IRS: Traditional and Roth IRAs · IRS: Roth IRAs
Check the details for your year
Contribution limits apply across traditional and Roth IRAs combined. Eligibility, deductibility, and withdrawal rules differ. Check the IRS rules for the relevant tax year rather than using an old dollar limit.
Your next step
Compare the tax treatment with your own situation and time horizon. If you are considering a conversion or have existing after-tax IRA money, get qualified tax help before acting.
Keep building your foundation.
More Build Wealth guides