Americans are infamous for not adequately saving for retirement. If you find yourself in this position, you need to start taking action immediately. For many people, this means looking to an individual retirement account, better known as an IRA.

The Internal Revenue Code used to allow for very few retirement investment options. Then politicians started to realize that Social Security was going to be woefully inadequate when it came time to help retirees cope with the cost of living in their golden years. This problem became even direr as it became apparent that people were generally living longer.

To deal with the situation, various administrations started instituting tax favored savings options like 401(k)s and IRAs. Then a move was made to create multiple IRA options for saves. This breaks down to the traditional IRA and the Roth IRA. The question we all now face is which one should we choose? Personally, I am a fan of the Roth.

There are many differences between the two IRAs. The primary one has to do with whether you take the tax savings up front or at the end of the retirement period. You can contribute up to $5,000 with a traditional IRA per year and do it with pre-tax dollars. This saves you money during the year of contribution. In contrast, you must use after-tax dollars when making a contribution to a Roth, but there is one huge benefit to it. You get to withdraw the gains tax free when you retire.

So, how do you choose? Well, there are certainly merits to both retirement vehicles at first glance. In truth, you really can't go wrong with either one. Personally, however, I think the Roth is the better investment by far. Why? Taxes. The national debt level is currently $13 trillion. Unfunded liabilities that will be added to this figure for Medicare, the prescription pill bill and Social Security will add another $100 trillion over the next thirty to forty years. However you slice it, that means tax rates are going to be increased in the future. It might be next year or it might be in ten. Regardless, I would rather be taxed at the relatively low rates we have today than the high rates we will undoubtedly have down the road.

Whatever you do, you should be putting away money for retirement. Between the traditional IRA and the Roth, I personally feel the Roth is superior.