Types of IRAs: Roth vs. Traditional

Mountain banner for individual retirement account article

Q: What is the difference between a Roth IRA and a Traditional IRA?

A. The two types of Individual Retirement Accounts (IRAs) are similar retirement savings vehicles. Despite the name, IRAs are also available for married couples who have filed a joint tax return. 

Traditional account holders are able to benefit from making tax-deductible contributions to their IRA. However, withdrawals from this account are treated as taxable income. A Roth IRA, on the other hand, does not give an immediate tax break for deposits. Its advantages come in the longer term–contributions can be withdrawn at any time without tax penalties, and qualified withdrawals after retirement are not taxed.

Which type of account will benefit you most depends on your tax bracket during your working and retirement years. Roth IRA returns can be higher, but provide fewer short-term tax benefits. Traditional IRA returns can give a higher tax break during one’s working years, but penalize the holder for early withdrawals and require them to take mandatory distributions around age 70. You can use an IRA calculator to determine which is right for you. Depending on your situation, taking both may be the best option.


Open an IRA at Alpine Bank

We can help you decide what type of IRA account is best for your situation and assist with your plans for retirement. Contact a member of our Wealth Management team to learn how Alpine Bank can help you achieve financial independence.

wealth management disclosure statement

About This Author


Alpine Bank Staff

Alpine Bank is an independent, employee-owned organization with headquarters in Glenwood Springs and banking offices across Colorado’s Western Slope, mountains and Front Range.

More about Alpine Bank Staff

Allpoint It’s your money after all. Find a surcharge-free ATM