What is the difference between a traditional IRA and a Roth IRA?

A traditional IRA and a Roth IRA are both individual retirement accounts, but they have key differences in how they are funded and taxed. A traditional IRA allows individuals to contribute money on a pre-tax basis, which means you can deduct your contributions from your taxable income, but you will pay taxes on the withdrawals during retirement. On the other hand, a Roth IRA is funded with after-tax dollars, meaning you contribute money that has already been taxed. The advantage of a Roth IRA is that qualified withdrawals during retirement are tax-free. Additionally, traditional IRAs have age-related distribution requirements starting at 72, while Roth IRAs have no distribution requirements. The choice between the two depends on individual factors such as current and future tax situations, income levels, and personal retirement goals.