 TITLE: How to Open an IRA in 3 Easy Steps CONTENT: 1\\. Decide Between a Traditional and Roth IRA\n---------------------------------------------\nYou have two main choices: a traditional IRA and a Roth IRA. In simple terms, a traditional IRA is more of a \"buy now, pay later\" proposition. You use pretax dollars to fund it—meaning you may be able to deduct contributions from your income taxes—and defer paying taxes until you withdraw the money in retirement. By contrast, you don't get a tax deduction when you contribute to a Roth IRA; it's funded with income that's already been taxed. As long as you follow eligibility guidelines, however, you don't pay taxes on Roth IRA withdrawals. You can even pass along your Roth IRA tax-free to your heirs.\nHere's a chart comparing some of the features of traditional and Roth IRA accounts:\nWhich type of account is better for you? Ask yourself three questions:\n*   **Are you eligible to deduct your contributions?** Check the IRS Guide to IRAs for information. Your deductions may be limited if you or your spouse contribute to an employer-sponsored retirement plan such as a 401(k).\n*   **Are the tax savings worth it?** If you have a high income, the tax deduction could be significant. Your tax savings may not be as impactful if your income is lower, however.\n*   **Would you rather have a tax advantage before or after you retire?** With a Roth IRA, you forgo an immediate tax deduction in favor of getting a tax break when you're retired. Getting to keep and spend more of your retirement money will help you maximize the dollars you've saved.\nCan't decide? If you're eligible and you have enough funds, you can open both a traditional and a Roth IRA. The contribution limit for both types of accounts is $6,000 annually, with an additional $1,000 if you'll be age 50 or older by the end of the tax year. END