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Dawn193 writes...

People who advise me to do the Roth say: "Pay the taxes now so you get it all at the end!" (But do I want to pay more taxes everyear?)

You're not actually paying MORE taxes than you would be, rather passing up a tax deduction. When you fund a Roth you're using after-tax money, however you will not be assessed an "extra tax" so you're not actually paying anything more than if you contributed no money to an IRA. With a traditional IRA you fund with after-tax money, yet are allowed to deduct the amount you contributed on your income taxes.

In the case of the Roth, you will take the money out tax free. In the Traditional, your money will be taken out and taxed at ordinary income tax rates. Both IRAs are tax-sheltered, that is, you pay no capital gains taxes when buying and selling securities within the IRA.

In my opinion, Roth is the only way to go, but you may have other circumstances where a Traditional might make sense. For example, if you think you'll be in a lower tax bracket when you retire, it might make sense to choose Traditional.

I know there's a whole section on IRA's here on the Fool site. Do a search and you should find it. Good luck!

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