Broker Check
Client Login

Illinois Office

2403 Harnish Drive, Ste. 201

Algonquin, IL 60102
(847) 428-3997

Florida Office

5245 Office Park Blvd. Suite 103

Bradenton, FL 34203
(941) 308-9862
Traditional vs. Roth IRA: Which One Actually Makes Sense for You?

Traditional vs. Roth IRA: Which One Actually Makes Sense for You?

March 11, 2026

Let’s be real for a second: retirement planning usually feels like a total chore. You hear terms like "tax-advantaged" and "contribution limits," and your eyes start to glaze over. But here’s the thing—choosing between an IRA and a Roth IRA can have a significant impact on your retirement savings, depending on your tax situation.

In a recent deep-dive session, Fiduciary Financial Advisor Daniel Leitner of Hendricks Wealth & Estate Management broke down the "Traditional vs. Roth" debate in a way that actually makes sense for normal people. If you’ve been staring at your investment options and wondering where your next $100 should go, here is the plain-English version of that conversation.

The "Bucket" Concept: What is an IRA?

Before you pick a side, you have to understand what you’re actually looking at. Daniel explains that an IRA isn't an "investment" itself, like a specific stock or a bond. Think of it more like a container [1:33].

You open this container at a place like Fidelity or Vanguard, and then you choose what to put inside it. For 2025, the government lets you put up to $7,000 into these containers (or $8,000 if you’re 50 or older) [1:49]. The big question is: which "version" of the container should you use? 📥

Traditional IRA: The "Tax Break Right Now" Move

The Traditional IRA is for the person who wants to see a lower tax bill today.

  • The Vibe: You put money in, and you often get to deduct that amount from your income when you file your taxes [2:34]. It’s an immediate win for your bank account.

  • The Catch: You aren't exactly escaping taxes; you’re just procrastinating. The money grows without being taxed while it’s in the account [2:50], but the second you retire and start pulling money out to pay for your life, the IRS treats every withdrawal like a regular paycheck and taxes it accordingly [2:57].

Is this for you? Daniel suggests this is usually best if you’re in your "peak" earning years. If you’re making more money now than you ever expect to spend in retirement, take the tax break now while you’re in a high bracket [4:55].

Roth IRA: The "Tax-Free Forever" Move

The Roth IRA is the fan favorite, and it’s easy to see why. It’s the ultimate move for "future you." 

  • The Vibe: You don’t get a tax break today. You put in "clean" money—dollars you’ve already paid taxes on [3:15].

  • The Big Win: Because you paid the IRS upfront, they leave you alone forever. Your money grows, and when you retire, you can withdraw every single penny of the growth and the contributions completely tax-free [3:31].

  • The "Emergency" Perk: Life happens. Unlike other retirement accounts, a Roth IRA lets you pull out your original contributions (the money you put in, not the interest) at any time without a penalty [6:02]. It’s like a retirement fund that doubles as an emergency backstop. 🛡️

Is this for you? If you’re younger or just starting out, a Roth IRA may be a good option, but it’s important to consider your unique situation or consult a professional [6:48].

The Annoying "Rules" (RMDs and Income Limits)

The government doesn't give away these tax perks without some fine print. Daniel pointed out two big ones:

  • The "Use It or Lose It" Rule: With a Traditional IRA, the government eventually wants their cut. Once you hit 73, you must start taking money out (Required Minimum Distributions), even if you don't need it [4:40]. The Roth IRA doesn't have this rule—you can let it sit there for your whole life [5:39].

  • The "Too Much Money" Rule: If you make a very high income (for 2025, starting around $236,000 for married couples), the IRS actually starts to phase you out from putting money directly into a Roth IRA [13:18]. 🛑

What If I’m Over the Income Limit? (The Backdoor Strategy)

If you’re a high earner, Daniel mentioned a "pro move" called a Roth Conversion [7:50].

This is essentially moving money from a Traditional IRA into a Roth IRA. You pay the taxes on it now, but then it’s tax-free for good. It’s a great strategy if you think tax rates are going to go up in the future or if you have a year where your income is unexpectedly lower than usual [8:48]. 🚪✨

The Bottom Line: Which Should You Pick?

It really comes down to a bet: Do you think you'll be in a higher tax bracket now, or when you retire?

  • If you expect to be in a lower tax bracket in retirement, a Traditional IRA may be more beneficial.

  • Betting on a higher future bracket (or just want tax-free income)? Go Roth.

As Daniel Leitner says, the best strategy for most people is actually tax diversification—having a little bit of both [10:23]. But the most important thing? Just start. The math shows that the time your money spends in the market is way more important than which tax bucket you choose [10:44].

Want to see the full breakdown? If you want to hear the specific Q&A where Daniel and Jim Hendricks answer questions about 1099 employees and combining accounts, you can watch the full video below.

If you have questions or want to start building your own retirement plan, reach out to the team at Hendricks Wealth & Estate Management at email, phone numbers or website below.