Craig Wear, CFP®Craig Wear, CFP® | Expert in Roth Conversions & Tax-Efficient Retirement Strategies for IRA Millionaires

Roth IRA vs Traditional IRA

23 Aug 2024 · 1 min

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This YouTube video (Craig Wear, CFP®, Aug 23, 2024) explains the key differences between Traditional IRAs and Roth IRAs. The speaker contrasts tax timing: Traditional IRAs provide an upfront tax benefit (tax-deductible contributions), tax-deferred growth, and taxable withdrawals (including RMDs and withdrawals after age 59½); Roth IRAs operate opposite (implied: after-tax contributions and tax-free qualified withdrawals). The video also mentions Roth conversions as a topic of interest for suitable candidates.

Chapters

The differences between that traditional IRA and a Roth IRA are pretty profound and a big reason why people who are really good candidates to do Roth conversions go to them. So in a traditional ira, the deal that you made with the government was that you put money away, you save some taxes at the time you did the contribution, and then it grows totally tax deferred for as many years as you want it to. And then when you start taking money out, either through forced distributions, through required minimum distributions, or anytime you just want to take money out after age 59 and a half, you got to pay tax on it. In a Roth ira, it kind of works the opposite.