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The Difference Between Traditional and Roth 401(k) and IRA

Important differences exist between the Traditional and Roth versions of both the employer-sponsored 401(k) plans and Individual Retirement Accounts (IRA).

What is a Roth IRA?

A Roth IRA is an individual retirement account which varies in a number of ways from the Traditional IRA. The principle difference is two-fold.

What is a Traditional IRA?

A Traditional IRA is one of several types of IRA’s, or Individual Retirement Accounts. The financial planning process will reveal if and when it is advantageous to use a Traditional IRA.