How Do Roth And Traditional Retirement Accounts Work?

Clients frequently face the choice between Roth and Traditional retirement accounts, but they may not understand the fundamental difference between the two.

The “How Do Roth And Traditional Retirement Accounts Work?” Visual Explainer simplifies the concept by focusing on one of the key differences: when taxes are paid.

It illustrates:

• How Traditional contributions generally provide a tax benefit today, with withdrawals generally taxed later
• How Roth contributions are made with after-tax dollars, with qualified withdrawals generally tax-free
• Why expectations about current and future tax rates can be an important consideration when choosing between the two

Use this Visual Explainer to help clients understand the basic tax trade-off between Roth and Traditional accounts before exploring which approach may be appropriate for their situation.

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