Investors may also choose another form of individual retirement account called a Roth IRA. The traditional IRA offers “jam today” in the form of an immediate tax deduction (provided your income is low enough to make you eligible). Once in the account, the money and its earnings are taxed only when taken out at retirement. The Roth IRA offers “jam tomorrow”—you don’t get an up-front tax deduction, but your withdrawals (including investment earnings) are completely tax-free. In addition, you can Roth and roll.
