traditional IRA vs Roth IRA

So with my layoff I have $1,700 in my pension plan, they discontinued pension plans 2 months after I started. Per
The paperwork I need to roll the money into a Roth IRA or tradional IRA. Any insight on either of these and if you have one who do you have it through? I'm lost.

Re: traditional IRA vs Roth IRA

You can open either IRA accounts at almost any bank or financial institution. Since it's not a lot of money, I'd probably just do a traditional IRA. The main difference between the two is where you pay your taxes. With a traditional, contributions are deductible on your taxes in the year you make the contribution. When you withdraw the funds in retirement, they are taxed. Roths are not deductible when you make the contribution, but earnings and withdrawals are generally not taxed when you use the funds in retirement.

Re: traditional IRA vs Roth IRA

I believe that if you roll into a Roth IRA you'll be taxed on the amount as income this year.

Re: traditional IRA vs Roth IRA

traditional IRA vs Roth IRA

See - I would roll it into a Roth IRA and then keep contributing to the Roth from now until whenever. Your Roth is not taxed when you begin to use it. I would check to see how much in taxes you'd pay for opening a Roth. I also thought that if you rolled a pension or existing 401k into a Roth that you didn't pay taxes on it bc you are not using it as income; it's going from one savings to another. I'd double check it.

Message edited 10/6/2016 10:07:17 AM.