Roth IRA Comparison Graph A Roth IRA works like a traditional IRA in reverse: contributions are in post-tax dollars, but growth is completely tax-free. Once you put your money in, you never pay taxes again. This graph gives you a quick comparison between a Roth IRA and a traditional deductible IRA. We'll assume you make equal contributions every year for a specified period, and then withdraw everything in a lump sum. The final values shown are post-tax.

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Annual Contribution: $ Growth Rate:   % Years:   Tax Rate:   %	Investment Values at Maturity
	Traditional IRA
	Roth IRA
	Tax Payments

Actually, the only advantage of this type of IRA (aside from different regulations on income limits and payout schedules) is that it effectively lets you contribute more money, by raising the contribution limit from $2000 in pre-tax dollars to $2000 in post-tax dollars. If you do a true "dollar-for-dollar" comparison of these two IRAs by expressing the contribution to the Roth IRA in equivalent pre-tax dollars, the two payouts are exactly the same. Express Roth IRA Contributions in: post-tax dollars equivalent pre-tax dollars This is really a too-brief snapshot of what is a very significant new type of IRA. For the full picture, see the main article Understanding the Roth IRA.

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