Retirement planning is the process of determining retirement income goals and the actions and decisions necessary to work toward those goals. Retirement planning includes identifying sources of income, estimating expenses, implementing a savings program, and managing assets and risk.

As life expectancy continues to increase the need for increasing your retirement income increases. Employer sponsored plans such as 401k plans are how many Americans fund their retirements. There are many taxable plans, Roth IRA's, and tax deferred plans, Traditional IRA's, that are available to individuals outside of employer sponsored plans.

• A Traditional IRA* is an individual retirement account or individualized retirement play that provides tax advantages for retirement savings. It is a government sponsored, tax-deferred personal retirement plan. Taxes are deferred until the account owner takes a distribution from the IRA. When money is withdrawn from a Traditional IRA it is taxed as regular income.
• A Roth IRA** is a tax-advantaged retirement savings account that allows you to withdraw your savings tax-free. Roth IRA's are funded with after-tax dollars; the contributions are not tax-deductible. But once you start withdrawing funds, the money is tax-free.

Therefore, the biggest difference between a Roth and a traditional IRA is how and when you get a tax break: The tax advantage of a traditional IRA is that your contributions are tax-deductible in the year they are made. The tax advantage of a Roth IRA is that your withdrawals in retirement are not taxed. Roth IRAs are a great retirement-savings account if you expect your tax rate to be higher in the future.

*Contributions to a traditional IRA may be tax deductible in the contribution year, with current income tax due at withdrawal.  Withdrawals prior to age 59 ½ may result in a 10% IRS penalty tax in addition to current income tax.

**A Roth IRA offers tax deferral on any earnings in the account. Qualified withdrawals of earnings from the account are tax-free. Withdrawals of earnings prior to age 59 ½ or prior to the account being opened for 5 years, whichever is later, may result in a 10% IRS penalty tax. Limitations and restrictions may apply.