Traditional vs. Roth IRAs
Individual retirement accounts with opposite tax timing: traditional IRA contributions may be tax-deductible and withdrawals are taxed as ordinary income with required minimum distributions; Roth contributions are after-tax and qualified withdrawals — including all growth — are tax-free, with no lifetime RMDs.
Both require earned income to contribute, share one annual contribution limit (indexed yearly, with a catch-up for those 50 and older), and shelter growth from current tax. Employer plans like 401(k)s follow the same traditional/Roth logic at higher limits, with ERISA governing private-sector plans.