This article was updated on May 12, 2016.

Most investors have a combination of different accounts that they use. For money that you intend to use in retirement, a Roth IRA can be a great way to take advantage of unique tax benefits that can expand the size of your nest egg. Yet for greater flexibility, having a regular taxable brokerage account also has its advantages. Let's take a look at the various benefits that each of these types of accounts offers.

The huge benefits of a Roth IRA
Roth IRAs are great vehicles for saving. Money that you invest grows on a tax-deferred basis for the entire time that it remains in the account, allowing you to avoid having to pay taxes on interest, dividends, capital gains, and other income you receive along the way. Moreover, in most situations, when you take money out in retirement, you don't have to pay any taxes on the income or gains from the account. That tax-free treatment is extremely unusual and sets apart Roth IRAs both from regular taxable brokerage accounts and from several other types of tax-favored retirement accounts.

The price you pay, though, is that access to Roth IRA money is somewhat limited. You can withdraw the money you contribute to a Roth IRA without any tax consequences and without penalty, but if you start tapping into the income that your contributions generated, you'll have to pay taxes if you withdraw them before you reach age 59 1/2. In addition, early withdrawal penalties can apply if you don't qualify for an exemption.

The flexibility of a regular taxable brokerage account
Regular brokerage accounts don't come with any inherent tax benefits, forcing you to manage your tax liability much more closely. Any interest and dividends you receive are generally taxable to you in the year in which you receive them, and if you sell an investment, you'll have to pay the resulting capital gains tax liability.

Yet there are a few things that make taxable brokerage accounts attractive. First, you can determine the timing of when you have to pay taxes on capital gains, because as long as you hold onto a stock or other investment, you don't have to pay tax on any rise in its value. Only when you decide to sell will capital gains tax liability come into play.

Another benefit of regular brokerage accounts is that there are no limitations on when you can withdraw money and for what purpose you can use it. You don't have to worry about penalties for early use.

Finally, if you choose a losing stock, a regular brokerage account will let you recognize a capital loss and earn a tax break from it. Roth IRAs generally don't give you any benefit from a loss except in very rare circumstances.

Both taxable brokerage accounts and Roth IRAs have their advantages and disadvantages. There's also a great place here at the Fool where you can learn more about IRAs. The tax benefits of a Roth IRA can be very valuable, but the flexibility of a regular brokerage account can make having both a smart option for many investors.

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