However, you're allowed to take tax-free withdrawals from Roth IRAs as long as you follow the rules for withdrawing the funds. That means that if you take $1,000 out of your Roth IRA as a retiree, you will not owe any taxes on the money then.
By contrast, distributions from your traditional IRA are taxed at your ordinary income tax rate when the money is withdrawn. If you take $1,000 from your account as a retiree, your taxable income will be $1,000 higher, and you'll owe taxes on the $1,000 at whatever your tax rate is at that time.
If you expect you will be taxed at a higher rate as a senior than you are now, you should contribute to a Roth IRA. If you expect you will be taxed at a lower rate as a senior, you should contribute to a traditional IRA. You always want to pay taxes when your rate is lower.
Eligibility for the accounts differs
You're not allowed to contribute to a Roth IRA if you make more than the income limits. While you can use a backdoor Roth IRA to get money into this account, you cannot directly make a contribution to one.
The rules are different for a traditional IRA. If neither you nor your spouse is eligible for a workplace retirement plan, you can make tax-deductible contributions to a traditional IRA no matter what you earn.
If either you or your spouse does have a workplace plan, you lose eligibility to make deductible IRA contributions at a certain income threshold. You can still make non-deductible contributions and benefit from tax-deferred gains, but you are not allowed to take a deduction for your contribution in the year it is made.
