What’s the difference between a traditional individual retirement account and a Roth IRA?
The main distinction is the timing of the taxation. When you have a traditional account, you make contributions before you pay taxes on the income. Because of this, distributions from the account are taxable.
With a Roth IRA, the money that you contribute into the account has already been taxed. As a result, you don’t have to pay taxes if you withdraw money from the account.
In addition to the tax structure, you are required to take mandatory minimum distributions from a traditional account when you are 72. There is no such requirement for a Roth individual retirement account.
With either type of account, you can continue to make contributions throughout your life with no age limit.