Roth v. Traditional IRA

Now it is unlikely that social security as we know it will be around for a long period of time and of course it is a smart idea to get started early saving in a retirement account. As a rule of thumb Roth accounts favor young investors who haven't yet maxed out their earning potential since the investment is taxed at the front end. (ie if you are currently in the 15% tax bracket that is what your money will be taxed at before being invested and can appreciate tax free). Traditional IRA's get taxed on the back end, but if you are already in a high tax bracket or will not be when you retire this might be irrelevant.

The area between the two is more grey -- can you figure out when it's worthwhile to plow money into a traditional IRA in place of a Roth? Van Kampen has a nice calculator complete with graphs (a must for visual people or those with short attention spans).

At the bottom of the charts you can see how much you will need to draw each year at retirement based on how much you would need to live off if you were retired today - a nice bonus for those of us who wince at the thought of dusting off the financial calculator and running some future value equations or haven't ever thought through how much that inflation adds up.

MoneyChimp also has a general background and comparison of each type of account (yeah I know, the name makes it hard to take seriously).