What are the main differences between a Traditional IRA and a Roth IRA?
Earnings on contributions you make to a Traditional IRA will grow tax-deferred, which means you won’t be taxed on earnings until you start making withdrawals from the account (at an eligible age). Withdrawals from Roth IRAs are tax-free and penalty-free if certain requirements are met.
In short, it primarily comes down to taxes – more specifically, when you pay income taxes on the money you put into the account and how the earnings on that money will be taxed at the time withdrawals are made.
There are certain exceptions to the tax deductions depending on adjusted gross income, filing status and whether you (or your spouse) are covered under a retirement plan at work.