Roth IRA vs. Traditional IRA: Which is Better?

Piggy banks with "traditional IRA" and "Roth IRA" written on them face each other with a roll of cash between them.

Deciding between a Roth IRA vs. a traditional IRA boils down to taxes. Do you want to reap the tax advantages of traditional IRAs up front, with contributions taken out of your paycheck for a lower tax burden in the current year? Or would you prefer to pay those taxes now and enjoy tax-advantaged withdrawals in retirement with a Roth IRA?

Americans believe they'll need $1.26 million to retire comfortably, according to findings from Northwestern Mutual’s 2025 Planning & Progress Study, or about 80% of their pre-retirement income. That makes an individual retirement account (IRA) an excellent tool for building a robust nest egg.