First, let’s see if you qualify for a Traditonal or Roth IRA. Annual contributions to both accounts are the same in 2016 as in 2015 -- up to $5,500 per person, or $6,500 for individuals who are 50 or older. You may earn too much to fund a Roth, because they're available only to individuals whose modified adjusted gross income doesn't exceed a maximum of $132,000 in 2016. For married couples filing a joint tax return, eligibility requirements end at $194,000. With a traditional IRA, you may be able to claim a full income-tax deduction for your contributions, as long as you don't have access to a retirement plan at work, such as a 401(k). Single filers who do have access to such a plan can take a full deduction if they earn $61,000 or less, or a partial deduction up to $71,000 in 2016. The income limits are trickier for married couples filing jointly. If you have access to a plan, the limits are $98,000 to $118,000; if your spouse has access to a plan but you do not, the limits are $184,000 to $194,000 for joint filers. Remember: If your employer does not offer a retirement plan, you can get the full tax deduction for traditional IRA contributions regardless of your income. Roth over Traditional IRA Why I like Roths over Trad IRAs is your money is tax-free forever. In a Roth IRA, you don't have to take mandatory withdrawals at age 70-1/2 and you can keep contributing to it. Roth IRA’s a definitely the way to go, if you qualify. I was at a party and met 2 retired doctors recently who are close to age 70. When they found out I’m a financial expert, they both told me about their unhappiness with Required Minimum Distributions starting at age 70-1/2. These are required withdrawals you must make from a Traditional IRA and are based on your life expectancy. If you don’t take out the required Min Distr. from a traditional IRA, there is a 50% penalty. They will be forced to take money out and likely pay tax on it, whether they want the withdrawal or not. It’s a forced liquidation so the govt can collect taxes. Had they had the opportunity to invest in a Roth IRA, they wouldn’t have to do Required minimum distributions, which will likely cause them to pay tax and maybe put them into a higher tax bracket. What they could have done is take distributions between age 59-1/2 and 70-1/2 to avoid any penalties. (There is a 10% penalty if you wd money prior to age 59-1/2), but you can also avoid it if you qualify for one of 9 exemptions: They include death (for withdrawal by a beneficiary), disability and qualified college bills like tuition, fees, books, supplies, room and board. Other reasons include a first time home purchase, unemployed and have medical insurance premiums, medical expenses, call to active duty in the military, IRS levy, and substantially equal periodic payments until you’re 59-1/2. I’m not going to go into the nuances of each one of these, but I’ll put it in the show notes on my website if you think one or more may apply to you. Go here for all the details on the exemptions: www.investopedia.com/articles/retirement/02/111202.asp If you don’t take tax efficient withdrawal now, the Traditional IRA will keep growing and you could have a lot of tax later when you have to take RMD’s at 70-1/2. With a Roth, you don’t have RMD’s at any age, you can leve beneficiaries a large, tax free account and you’ll be in control of your account w/o income tax concerns. You can move money from a Traditional to a Roth, but that will trigger tax on the pre-tax amount, which are the contributions that were tax deductible and any investment earnings that followed. But all Roth IRA distributions will be untaxed after 5 years and age 59-1/2.