Should You Open a Roth IRA or Traditional IRA?

March 23, 2020
When choosing between a Roth or traditional IRA, it comes down to whether or not you think it’s smarter to pay now or pay later, given your particular situation.

Listen on Apple Podcasts, Google Podcasts, Spotify or copy to your RSS reader.

Transcript Open new window

After you listen

  • If you have questions about account types or your portfolio, you can always call Schwab at 877-279-4476.
  • If you have questions about account types or your portfolio, you can always call Schwab at 877-279-4476.

Almost everyone has the goal of saving for retirement. But before you can do so, you face one of the most fundamental questions about investing: Which type of account should you choose? If you’re lucky enough to have a workplace retirement plan, that’s often a great place to start. But if you don’t—or even if you do and want to save more, or just want additional options—the individual retirement account, or IRA, is a popular choice for its tax-friendly features. However, choosing between a traditional IRA and a Roth IRA requires some difficult forecasting.

On this episode, Mark Riepe is joined by Hayden Adams, CPA, CFP®, director of tax and financial planning at the Schwab Center for Financial Research, to unpack the complexities underpinning the Roth-vs.-traditional decision.

  • Account choice isn’t a conundrum only when you’re accumulating assets. Listen to the episode “How Can You Pay Yourself in Retirement” to hear more about how to coordinate withdrawals across multiple accounts.
  • Remember that tax laws are always subject to change. You can check out the IRS Newsroom page regularly for updates.

Subscribe to Financial Decoder for free on Apple Podcasts or wherever you listen.

Financial Decoder is an original podcast from Charles Schwab.

If you enjoy the show, please leave us a rating or review on Apple Podcasts.

Which IRA is right for you?


Income Too High for a Roth IRA? Try These Alternatives

If you're interested in contributing to a Roth IRA but your income exceeds IRS limits, you still have options to save for retirement in a tax-smart way.

Saving for Retirement: IRAs, 401(k)s, and More

We break down which retirement accounts—IRAs or 401(k)s—may be right for you.

IRA Rules: 8 Things You Need to Know

When you're ready to choose an IRA, one of your first tasks is to figure out how the rules for each type of IRA line up with your personal situation.