The key difference lies in taxation. With a traditional IRA, you may deduct contributions from your taxable income, but withdrawals in retirement are taxed as ordinary income. With a Roth IRA, you pay taxes upfront, but withdrawals in retirement are tax-free.
This distinction means the “best” choice depends on your current and future tax situation. If you expect your tax rate to be higher in retirement, a Roth IRA is often more advantageous. If you expect it to be lower, a traditional IRA may save you more money.
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