At their core, both Traditional and Roth retirement accounts—whether 401(k)s or IRAs—help you build wealth for the future. The biggest difference? When you pay taxes.

• Traditional Accounts (401(k), IRA): You contribute pre-tax dollars, meaning you get a tax break now but owe the IRS later when you withdraw in retirement.

• Roth Accounts (Roth 401(k), Roth IRA): You contribute after-tax dollars, meaning you pay taxes now, but your money (including gains!) comes out tax-free in retirement.

So, do you want the tax break today or the tax-free income tomorrow? That’s the million-dollar question.

Traditional Accounts: Delay Taxes, But Pay Later

✅ Lower taxable income now – Your contributions reduce your taxable income today, potentially lowering your tax bill.

✅ Ideal for high earners – If you’re in a high tax bracket now but expect a lower one in retirement, this could be a win.

✅ Employer match perks – Many employers offer matching contributions to Traditional 401(k)s, essentially giving you free money.

❌ Required Minimum Distributions (RMDs) – The IRS won’t let you defer taxes forever. Once you hit age 73, you must start withdrawing, whether you need the money or not.

❌ Tax bomb in retirement – Every withdrawal is taxed as regular income, which can potentially push you into a higher bracket than you're in now.

❌ Less flexibility – Early withdrawals come with penalties and taxes unless they qualify for exceptions (like first-time home purchases or certain medical expenses).

Roth Accounts: Pay Now, Enjoy Later

✅ Tax-free growth – You’ve already paid taxes, so your future self enjoys your contributions and any growth 100% tax-free income.

✅ No RMDs – Unlike Traditional accounts, Roth accounts don’t force you to withdraw at 73. Your money can keep growing tax-free for as long as you want.

✅ Great for generational wealth – If you don’t need the money, you can leave it to your heirs tax-free, giving them a powerful financial head start.

❌ No tax break today – You won’t get a deduction now, which can sting if you’re looking for ways to lower your taxable income.

❌ Income limits – Roth IRAs have income limits, meaning high earners may not be eligible to contribute directly (though backdoor Roth strategies exist).

Required Minimum Distributions (RMDs): The IRS’s Way of Collecting Taxes

Here’s the deal: The government won’t let you hoard tax-deferred money forever. With Traditional accounts, RMDs kick in at age 73, forcing you to withdraw a calculated amount each year—whether you need it or not. This can mean surprise tax bills and potential bracket jumps if you’re not careful.

Roth IRAs, on the other hand, have no RMDs, making them an incredible tool for building generational wealth. Want to pass that money down to your kids tax-free? A Roth lets you do that.

The best choice comes down to tax strategy and stewardship. If you’re in a low tax bracket now and expect higher taxes later, a Roth is a no-brainer. If you’re earning big bucks today and expect lower income in retirement, a Traditional account might make sense—but watch out for those RMDs down the road.

Dave Ramsey’s philosophy? Go for the Roth whenever possible. Why? Think about this: Do you expect tax rates to go up or down in the next 20-30 years? I think most of us would say "well up, of course." If that's the case, then getting your taxes out of the way now might make sense.  The sooner you get Uncle Sam out of your life, the more control you have over your money, rather than letting the IRS make your decisions for you.

Your retirement choices aren’t just about tax savings; they’re about building wealth for the life you want. Whether you go Traditional or Roth, the key is to invest consistently, stay out of debt, and remember that your future self is counting on you. And when in doubt—I always lean toward keeping more of your money tax-free in the long run.

Because let’s be real: Retirement should be about enjoying life, not worrying about what percentage Uncle Sam is taking. Choose wisely, invest diligently, and be a good steward of what you’ve been given!