If stepping up your retirement planning is part of your new year’s resolution, one key is to understand the pros and cons of traditional tax-deferred accounts in comparison with Roth accounts. Individual Retirement Accounts (IRAs) come in both “flavors,” and many employer accounts have both options as well.
The differences between Traditional and Roth affect your retirement in two main ways:
- How much money you’ll be able to spend in retirement after taxes; and
- Flexibility of withdrawals in retirement (this is affected in a couple of different ways).
Whether you are saving for retirement or are already retired and need to decide when to withdraw from which account, understanding the differences matters. To better understand how those differences play out and how you might put them to work for you, ISU Extension and Outreach has a new on-line mini-lesson (20 min). It’s part of our collection of retirement resources, which includes mini-lessons on five other topics and sixteen printable publications.
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