The main difference between a Roth IRA and a traditional IRA lies in the tax treatment of contributions and withdrawals. With a traditional IRA, contributions are typically tax-deductible in the year they are made, but withdrawals in retirement are taxed as ordinary income. Conversely, with a Roth IRA, contributions are made with after-tax dollars, but qualified withdrawals in retirement are tax-free. This means that with a Roth IRA, you pay taxes upfront, while with a traditional IRA, you pay taxes later when you withdraw the money.
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