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.

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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.

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