Listen Money Matters - Free Your Inner Financial Badass. All The Stuff You Should Know About Personal Finance.

We’re talking Roth and traditional IRA’s today with Darin Hayes, author of Beer Money: A Beer Drinker’s Guide to Personal Finance and Investing. Let’s put this in drinking terms.  Taxes are a hangover.  A Roth IRA gets the hangover out of the way before the drinking even commences because the money contributed is taxed before the contribution.  A Traditional IRA let’s you drink first and the hangover comes later because the money is taxed once it’s withdrawn. How should you decide when you want to suffer your hangover?  A very simple way to determine is whether or not you receive a tax refund.  If you get money back, do a Roth.  You likely are in a lower income bracket and don’t need the tax deduction.  A lot of young people with years ahead to work and invest will fall into this category.  If you’re older, making more and in a higher tax bracket, a Traditional IRA will give you that deduction that may drop you into a lower bracket. A Roth IRA also has the advantage of having no penalties for early withdra