Roth IRA and Traditional IRA have key differences but both help you save money towards retirement. I will not advice which one works best because each person’s life is different. According to CBS Money watch ”
- With a traditional IRA, you can’t contribute after you attain age 70-1/2. At that age, you must start making minimum withdrawals or incur substantial penalties. With a Roth IRA, you can contribute at any age, and you’re never required to make minimum withdrawals. So if you’ve attained age 70-1/2, your decision is made for you — you can only contribute to a Roth IRA.
- With a traditional IRA, you’ll incur a 10 percent early withdrawal penalty if you withdraw your contributions or investment earnings before age 59-1/2, unless an exception applies. With a Roth IRA, you can withdraw your contributions at any time. There will be a penalty if you withdraw your investment earnings before age 59-1/2, unless an exception applies.”
Even if you are in your 20s you should start saving for retirement because you are never too old to start doing so. I like the flexibility of Roth IRA; it offers the chance to invest in ETF’s, stocks, bonds, Real Estate or (REIT’s) without having to worry about paying taxes on gains. Another thing that I like about the Roth IRA is that you can use the money to buy a home. Click here to get further information on Roth IRA. If you want to compare Traditional IRA and Roth IRA click here.