🔍Money going into a Roth IRA has already been taxed, while money going into a traditional IRA is pre-tax.
🗝️Both traditional and Roth IRAs offer tax benefits, but at different stages - traditional IRA provides a tax break when contributing, while Roth IRA provides tax-free withdrawals in retirement.
💡Understanding the tax status of retirement accounts helps individuals make strategic decisions about saving and investing for retirement.
📈Contributing to both traditional and Roth IRAs diversifies tax strategies and provides flexibility in managing retirement savings.
💰Savings in traditional IRA grow tax-deferred, while savings in Roth IRA grow tax-free.