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Article: The Roth versus the Traditional IRA: an annual decision.
- Article from:
- The National Public Accountant
- Article date:
- July 1, 2003
- Author:
CopyrightCOPYRIGHT 2003 National Society of Public Accountants. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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Most investors would quickly say that Roth IRAs are always better than Traditional IRAs because of the "tax benefit." Are they right? Sometimes a Traditional IRA will provide an investor with higher after-tax retirement benefits.
IRA Characteristics
Currently, both the Roth and Traditional IRAs have the same annual dollar contribution limits. Contributions to a Roth IRA are on an after-tax basis while those to a Traditional IRA are on a before-tax basis. The main selling point of the Roth IRA is that all withdrawals, including returns on the original investment, will not be subject to income taxes. The individuals using Traditional IRAs will have to pay ...