The main difference is in the possible tax treatment. Funds you contribute to a Traditional IRA may be tax deductible, and you do not pay taxes until you begin to withdraw money during retirement. With a Roth IRA, your contributions are not tax deductible, and your earnings are not taxed. There are income restrictions and other differences, always consult a tax professional to see what is possible for your specific situation.
With a Traditional IRA, you can withdraw at anytime, but will pay a 10% penalty plus income taxes if you make a withdrawal before age 59 ½ or older.
What is the maximum per year I can contribute to my IRA?
There are several factors that play into your specific contribution limit, and it can change from year to year. We recommend you consult a tax professional or the IRS website for the most current information.