Which One? Roth IRA vs Traditional IRA

GREENSBORO, NC -- How much you pay in taxes? Your tax rate changed this year.

Nerdwallet shows you an apples to apples comparison. Let's say you're married and you make anywhere between $19,000- $77,000 your tax rate went from 15% to 12%. Yes, this means more money in your pocket.

It also means you might want to save for retirement in a different way than you have been. You might have your money in a Roth IRA or a regular IRA.
What's the difference? Certified Financial Planner Matt Logan explains.

Roth IRAs are money you put away that you pay taxes on now. At 59 and a half years of age, as long as the money has been there 5 years, you take the money out without paying taxes.

A regular IRA, you get a tax deduction now, it's money you haven't paid taxes on. When you take it out in retirement you're going to take income taxes on.

Here's the thing, now that your tax bracket has changed, you need to revisit this. Do you think you'll be paying more taxes by the time you retire or do you think your income will change enough you'll be bumped to a lower tax bracket?

If you expect to have a higher tax bracket in retirement, then you really ought to use the Roth IRA. If you're expecting a lower tax
bracket at retirement, it's better to take the reduction now
.

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