When it comes to retirement investing, you have a few choices for accounts that provide tax breaks. Many people pick traditional 401(k) and IRA accounts because they provide immediate tax savings in the year you make your contributions. That can make it easier to save, although the downside is that you're deferring your tax bill until later.
You have another option, though: a Roth IRA (and Roth 401(k) if your employer offers one). Roth accounts are contributed to with after-tax dollars. But as long as you fulfill certain requirements, withdrawals are made tax free.
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