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Tag: IRA’s

The Difference Between IRAs

In divorce actions, be sure to distinguish between the different tax treatment of Roth and traditional IRAs. Investopedia.com stated it clearly and concisely: “The traditional IRA allows you to contribute a portion of pre-tax dollars. That reduces your taxable income for the year while setting aside the money for retirement. The taxes will be due as you withdraw the money. The Roth IRA allows you to contribute post-tax dollars. There are no immediate tax savings, but once you retire, the amount you paid in and the money it earns are tax-free.”

https://www.investopedia.com/retirement/roth-vs-traditional-ira-which-is-right-for-you/

This means that a dollar in a traditional IRA is not worth the same as a dollar in a Roth IRA. Bear the tax consequences of funds in traditional IRAs and in Roth IRAs when you divide marital assets.

Utah Family Law, LC | divorceutah.com | 801-466-9277

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