Roth IRAsUnlike contributions to traditional IRAs, contributions to traditional IRAs are not tax deductible. However, distributions from Roth IRAs are not taxable, as long as you are at least 59 1/2 years old, and the IRA has been set up for at least five years. So, while there is less tax benefit on the front end, a Roth IRA does allow you to avoid paying taxes on money earned within the account. Therefore, the younger you are, the greater the tax advantage of a Roth IRA, since you will have more time to accumulate investment earnings and thus benefit from avoiding taxes on those earnings. Taxation can be a somewhat emotional issue. People often resent having to give back part of what they have earned, which is one reason why tax breaks have such a strong appeal. The key is to realize that there is generally some form of commitment required in order to take advantage of these breaks, and it is that long-term commitment that you have to weigh against the short-term tax benefit. Though tax breaks are designed to encourage Americans to raise their savings rates, in the end those tax breaks are somewhat limited. Thus providing for a comfortable retirement should be your primary motivation to save, rather than tax avoidance.