With a Roth IRA, you contribute money after taxes, your money grows tax-free, and you can generally make tax-free and penalty-free withdrawals after age 59 and a half. With a traditional IRA, you contribute money before or after taxes, your money grows with deferred taxes, and withdrawals are taxed as current income after age 59 and a half. A contributory IRA, or individual contributory retirement account, is another name for a traditional IRA. Technically, it's an investment account designed specifically for retirement.
Traditional IRAs and Roth IRAs are the most popular types of IRAs out there, so if you qualify for one of these, you must accept the agreement. The bankruptcy protection of an IRA covers all conventional individual retirement accounts, including traditional IRAs, Roth IRAs, SEP IRAs, SIMPLE IRAs and cumulative IRAs. When you have a traditional IRA and an employer-sponsored retirement plan, the IRS can limit the amount of your traditional IRA contributions you can deduct from your taxes.