finances can be complicated but they don't have to be i break down financial topics that may seem

complex and overwhelming so you can start taking action on your financial goals i'm auretowly

and it all starts here on Personal Finance Redefined.

Hello, everyone, and welcome back.

Today's episode is a fun one.

Today's about Roth IRAs versus traditional IRAs.

What's the difference?

Well, the reality is you've likely heard of them very often,

and the financial world can be tricky to understand at times and that's

because they add in a ton of jargon to be confusing so i'm going to give you before i get into the

you know what's the difference what should i use let's talk about some other words that mean the

exact same thing so here's some other words for traditional IRA that mean the same exact thing that you may

have heard. Let's first clear out what these really are. So the same thing as a traditional IRA

is an IRA. If someone says, I've got an IRA, or if you hear someone talk about, oh, did you

just invest in an IRA? They're talking about a traditional IRA,

not a Roth IRA. So once again, someone says, did you contribute to your IRA? That means traditional,

not Roth. Another word for IRA or traditional IRA is pre-tax money. What does that mean?

Well, pre-tax dollars mean that they are yet to be taxed.

They're pre-taxed before tax. They have not been taxed yet. And we know everything gets taxed at some point.

So what that means is that when you invest in an IRA or a traditional IRA, you are doing so

before taxes have been taken out.

Why would anyone do this?

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