Roth vs Traditional Retirement Accounts
Roth or Traditional? It's one of the first decisions when you start saving for retirement, and it really comes down to one question: do you want the tax break now or later?
Traditional — tax break now
With a Traditional account, contributions are typically made before tax, which lowers your taxable income today. The trade-off is that withdrawals in retirement are taxed as income. It tends to favor people who expect to be in a lower tax bracket in retirement than they are now.
Roth — tax-free later
With a Roth account, you contribute money you've already paid tax on, so there's no deduction today. The payoff is powerful: qualified withdrawals in retirement, including all the growth, are tax-free. It tends to favor people who expect to be in the same or a higher tax bracket later — often younger savers early in their careers.
A common middle ground
Many people split contributions between both to hedge against an unknown future tax rate, a strategy sometimes called tax diversification. And regardless of which you pick, capturing any employer match comes first — it's free money either way. (Tax rules vary by country and change over time, so confirm specifics for your situation.)
Project your savings
The account type affects taxes, not the underlying growth — and growth is where the magic happens. Use the retirement calculator to project your balance over time, and the compound interest guide to see why starting early matters more than the account choice itself.
Educational information only — not financial, tax, or investment advice.