IRA vs. Roth IRA

Question 1

Roth IRA

Answer 1

Money can be invested whose principle amount is initially taxed but then left alone. The principle amount and profits made within the IRA are denounced from any taxation even when withdrawn before or after retirement.

Question 2

Traditional IRA

Answer 2

The money that is invested is taxed, principle + earnings when withdrawn (Penalty + bracket tax) before retirement and after retirement (bracket tax).

Question 3

Which one is preferable and why?

Answer 3

Roth IRA is preferred because investors usually end up with more money pre and post retirement withdraw