Should I Get a Traditional or Roth IRA?

If you plan to have a financially comfortable retirement, there's no getting around the fact that you should use one or more tax-advantaged retirement accounts. I'm a big fan of the Individual Retirement Account or IRA because it's available to anyone with some amount of earned income, no matter if you're a teen or a retiree.

Unfortunately, I've found that many people have questions about IRAs that keep them from opening one up. For instance, they're unsure how IRAs work or whether they should have a traditional or Roth account.

This post will clear up any confusion you may have about IRAs. Keep reading to find out if a traditional or Roth is best for you, where to open your account, and how to invest IRA contributions wisely. 

What is an Individual Retirement Account (IRA)?

An important concept to understand about an IRA (or any retirement account, for that matter) is that it's not an investment. An IRA is an account where you put your investments. 

I think of a retirement account like your house or apartment. It shelters and protects you, but it isn't you. Similarly, an IRA is just a shelter that protects your investments from taxation while you own them inside the account.

You can put just about any investment in an IRA, such as stocks, bonds, exchange-traded funds (ETFs), mutual funds, index funds, certificates of deposit (CDs), and money market funds. If you open a self-directed IRA, you can even own less mainstream investments, such as real estate or businesses in your account. But we're just going to focus on traditional and Roth IRAs here.

What is a Traditional IRA?

First, let's cover a traditional IRA and its benefits. A traditional IRA is available to anyone with earned income, including wages, salaries,...

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