Comments on: What is the Difference Between a Roth IRA and a Traditional IRA?

By: Edna Baumdraher

Edna Baumdraher — Fri, 31 Dec 2010 09:11:28 +0000

I am almost 64. Today will be my last day at a job for 25 years. The company I am going with insists that I put $20,000 in an IRA, but I need $10,000 of liquid money to pay off some bills. Should that be a problem?
Thank you for clearing up the difference between the two.

By: rasta

rasta — Fri, 04 Jun 2010 17:01:19 +0000

i’m 36 yrs old and had a 401k plan with my employee of 7yrs now my job decided to relocate over seas and i’m out of job was thinking about moving it to IRA but not sure which one to pick help

By: Ben

Ben — Tue, 28 Apr 2009 14:20:35 +0000

@Trevor: I believe what you are describing is what was stated in the post itself…unless you are referring to another commenter?

By: Trevor

Trevor — Fri, 24 Apr 2009 19:40:31 +0000

The Last post was incorrect and yes you are confused.
You described a ROTH IRA and attributed the description to a Traditional IRA.
As a young inverstor, in a low tax baracet, The ROTH IRA is more beneficial to you becuase it is most likely that as you get older and earn more income you tax rate is higher. When you contribute funds to A ROTH IRA your contribution is taxed on the spot, at whatever tax rate you qualify for, and your earning and distributions after the age of 59 1/2 are “Tax Free”. As opposed to a Traditional IRA in which you can recieve the tax deduction of your contributions in the current year but when you withdraw your money after the age of 59 1/2 you will be taxed on every dollar at whatever tax rate rate you fit into at that time.

hope that helps

By: 13 days Remain to Make a 2007 IRA contribution | Milk Your Money

13 days Remain to Make a 2007 IRA contribution | Milk Your Money — Wed, 02 Apr 2008 19:43:00 +0000

[...] As the tax deadline slowly creeps up on us, so to does the deadline to contribute to a 2007 IRA (Individual Retirement Account). IRA’s, which historically have served as a secondary retirement plan for most individuals, are a great way of paying less in federal income taxes while still saving for your future. For more information on the differences between a Roth vs. Traditional IRA click here. [...]

By: Ben

Ben — Thu, 13 Mar 2008 00:12:52 +0000

@Blake: You are in a really good spot…I gleaned this out of About.com –

Consider the following four investors ages 25 – 55. Each invests $2,000 per year and earns 8%.

At age 65:

The investor who started at age 25 has over $585,000
The investor who started at age 35 has just $250,000
The investor who started at age 45 has just $98,800
The investor who started at age 55 has just $30,700

The results are quite dramatic and, as you might expect, the youngest investor comes out the best.

By: Blake

Blake — Wed, 12 Mar 2008 19:44:41 +0000

I’m 18 and I recently opened a Roth. The current tax advantages of a traditional would be nice for sure, but completely tax-free money at the end should make it worth it. I don’t understand why more people don’t utilize these things. Even if they are terrified to death of investing, they might as well use it for CD’s or something.

By: Frank

Frank — Tue, 11 Mar 2008 21:48:37 +0000

@Brett – Your right, thanks for the heads up!

By: Brett

Brett — Tue, 11 Mar 2008 20:43:17 +0000

“Again, the main characteristic of a traditional IRA is that contributions are taxed upon entering the IRA and grow tax-free”

I think that might be a typo from what I read above. I might be confused.