A short YouTube explainer contrasting Traditional IRAs and Roth IRAs. It describes that Traditional IRAs accept pre-tax contributions, grow tax-deferred, and withdrawals after age 59½ are taxed; Roth IRAs accept after-tax contributions, grow tax-free, and qualified withdrawals (age 59½+) are tax-free. The clip frames Traditional IRAs as the more common account due to historical tax-deduction incentives.
There are two different types or styles of accounts. You have a traditional ira, and you have a Roth ira. So a traditional ira, which is where most of the retirement wealth is in this country, by the way, because people have been conditioned to put money into an account to get a tax deduction, grow it tax deferred, and then when they take the money out after the qualified retirement age of 59 and a half, that's when they pay taxes. Then you go to the Roth ira, which is the second, call it ST style of account. The way the Roth IRA works is the money that goes in is after tax, it grows tax free. And then when you take the money out, you pay 0% tax. So as long as you follow the rules, the guidelines, you're 59, a half or older, you pay 0% tax.
Physicians and High Earners — What Real Estate Can and Can't Do for Your Taxes
