Choosing the right strategy for your retirement goals.
Planning for your retirement is one of the most powerful steps you can take toward securing your financial future. With the right support and clear information, you can make confident decisions that pave the way for a comfortable life after your working years.
An individual retirement account, also known as an IRAs, is a wonderful tool to help you save, but choosing the right type is an important decision. Together, let’s take a look at the options available to you, helping you understand which path aligns best with your personal financial goals.
What are the types of IRA savings accounts?
There are two main types of IRA savings accounts to choose from: Roth and Traditional. If you’re not sure which one is right for your retirement savings strategy, this post is for you.
The main difference between Roth and Traditional IRA savings account is the different type of tax benefit each offers. Before we break down the differences between these two IRA savings account options, here’s what’s the same for both:
- The contribution limit for 2025 is $7,000 for individuals under age 50, and $8,000 for those age 50 and older.
- The contribution deadline is Wednesday, April 15, 2026 (for the 2025 tax year).
- There’s no minimum to open, but the investments you make in the IRA may have minimums to open.
Roth IRA savings account
If your tax rate will be higher in retirement, a Roth IRA* is a good pick. Here are its main takeaways:
- There are no age restrictions to contributing to a Roth IRA savings account
- You can contribute any earned income at any time as long as your single income is less than $150,000 in 2025 ($236,000 if married filing jointly).
- Contributions are not tax deductible.
- Earnings grow in your account tax-free.
- You won't pay taxes on withdrawals of your earnings as long as you take them after you've reached age 59½ and you've met the 5-year-holding-period requirement.
- No distribution requirements; you can keep money in your Roth IRA for as long as you’d like.
Traditional IRA savings account
If your tax rate will be lower in retirement, a Traditional IRA* and its upfront tax advantages are a good pick.
- As a result of the SECURE Act, there are no age restrictions when contributing to a traditional IRA savings account.
- Contributions are tax-deductible.
- Earnings are tax-deferred until you withdraw.
- You’ll pay taxes on your withdrawals in retirement. If you make withdrawals before you’re 59 ½, you might incur a tax penalty.
- There is a required minimum distribution starting the year you turn 73.
Choosing the right IRA savings account is a significant step toward securing your financial future, and we're here to support you in making a confident and informed decision. By taking the time to understand your options, you are building a strong foundation for the retirement you deserve.
* Consult your tax advisor
