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Understanding IRAs: A Dichotomous Key Approach

When navigating the world of retirement accounts, it can often feel overwhelming. One helpful way to approach this decision is through a method reminiscent of a dichotomous key, which is used in biology to identify species based on observable characteristics. In the context of Individual Retirement Accounts (IRAs), this approach can simplify the process of determining which type of IRA—Roth or Traditional—best suits your financial situation.

Step 1: Assess Your Income Level

The initial factor to consider is your income and, more specifically, your tax bracket.