Roth and Traditional IRAs are both individual retirement accounts with annual contribution limits, but they tax your money at opposite ends of the journey.

With a Roth IRA, you contribute after-tax money, it grows tax-free, and qualified withdrawals in retirement are tax-free.

With a Traditional IRA, contributions may be tax-deductible, growth is tax-deferred, and withdrawals in retirement are taxed as income.

A simple rule: if you expect a higher tax rate in retirement, favour Roth; if you expect a lower rate, favour Traditional, and young earners in low brackets often benefit most from Roth.