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Do the math to pick the right type of IRA

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Since the tax laws for IRA conversions changed in 2010, now is as good a time as ever to consider which type of investment will make the most money for you in the long run.

The basic types of IRAs are Roth and Traditional. A key difference between a Roth IRA and Traditional IRA is when you get taxed: now or later. Generally speaking if your tax rate will be higher now than in retirement, a Roth can be a better option. Roth IRAs also afford more flexibility on accessing your funds early if you need them.

For more guidance, check out the following great resources:
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User Comments

posted by michael_monson (Contributor | 200 Points) on 03-15-2010 07:14 PM
Proration
Be careful on the proration. The IRS automatically mingles your IRA funds (pre and post tax) so if you're making after tax contributions - you could get bitten again
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posted by Lieselotte (Contributor | 120 Points) on 03-16-2010 04:05 PM
SEP - IRA
If you are self employed, check out the benefits of a SEP IRA. You can only contribute a % of your earnings.
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