Roth IRA vs Traditional IRA
Decide with confidence which IRA fits your income, tax bracket, and retirement plan, and open one correctly.
This course is for members
$9 unlocks every course in the library, this one included, plus a credit to build a topic of your own and at least 10 new courses every month.
What you will learn about Roth IRA vs Traditional IRA
The 7-day sprint
- What an IRA Actually Is. An IRA is not an investment; it is a tax wrapper you put investments inside.
- Traditional IRA: Deduct Now, Pay Later. A Traditional IRA can give you a tax deduction today and taxes every dollar you withdraw later as ordinary income.
- Roth IRA: Pay Now, Withdraw Free. A Roth IRA gives you no deduction today but makes qualified withdrawals, including all growth, completely tax-free.
- The One Question That Decides It. Choose Roth if your tax rate in retirement will likely be higher than today, and Traditional if it will likely be lower.
- Rules That Bite Later. Required minimum distributions, the pro-rata rule, and inheritance treatment can matter more than this year's deduction.
- Backdoor, Conversions, and Spousal IRAs. Income limits and lack of a job are obstacles with legal workarounds, not dead ends.
- Fund It and Automate It. The choice only pays off if the account is opened, funded, invested, and repeated every year.
The 80/20: the 7 concepts that matter most
- Pay Tax at Your Lower Rate
- The Wrapper Is Not the Investment
- Eligibility Rules Constrain the Choice
- Withdrawal Rules and the Five-Year Clock
- Required Minimum Distributions
- Conversions and the Pro-Rata Rule
- Order of Operations and Automation
The core idea, explained like you are 5
You can pay tax on retirement money either when it goes into the account or when it comes out, and the right choice is to pay whenever your tax rate is lower.
Then the quiz and the ladder
10 questions that correct you when you are wrong, and beginner, intermediate, advanced levels, each with a practical exercise.