This concept is extremely important and can have a massive impact on your retirement.

Here it is short and sweet:

  1. Traditional IRA / 401k – Save tax today; pay taxes later (in retirement). When you make contributions to a Traditional IRA / 401k, you reduce your taxable income NOW. When you retire and begin pulling money from this type of account, you will pay income tax on the amount you pull out.
  2. ROTH IRA / 401k – Pay tax today; NEVER PAY TAX AGAIN! Contributions into a ROTH IRA / 401k will NOT reduce your taxable income. BUT, once that money is in a ROTH type account, you will never pay tax on that money again.

Please don’t wait another day to figure this out…your retirement depends on it!

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