However, if youâre curious, there is a fascinating system behind ABA numbers. The ABA number is like an address that tells everybody where to find your account. ABA numbers are also known as routing transit numbers (RTNs). âABAâ is used because the American Bankers Association (ABA) assigns the numbers to banks.
In contrast to a traditional IRA, contributions to a Roth IRA are not tax-deductible. Withdrawals are tax-free under certain conditions (for example, if the withdrawal is only on the principal portion of the account, or if the owner is at least 59Â½ years old).
If youâre in a higher tax bracket, you wonât get a deduction for traditional IRA contributions. Therefore, a Roth is the better option. If youâre in a low tax bracket and can spare the funds, itâs probably better to forego the traditional and pay the taxes now vs having to pay a higher tax rate at withdrawal.