Roths differ from traditional retirement accounts
in how they’re taxed. A traditional 401(k) or IRA allows investors to
make tax-free contributions, deferring the taxes until the money is
withdrawn. Roth IRAs are the opposite in that investors pay income taxes
on the money as it goes in, not when it comes out. The benefits of Roth
IRAs include that you can make early withdrawals from contributions
without a penalty.
