Compare, contrast and comment on the lifetime financial effect of not making an IRA contribution, a traditional IRA contribution and a Roth IRA contribution.

Taxes are probably the most important aspect of personal financial

The lifetime financial effect of not making an IRA contribution is that you will miss out on the advantage of compound interest, which can help your investments grow tax-free for many years. As a result, you may have less money to use in retirement and may be forced to rely more heavily on social security benefits or government assistance.

A traditional IRA contribution allows you to make pre-tax contributions that are deductible from your taxable income. When you make these types of contributions, any earnings from those investments are taxed when they are withdrawn during retirement.

A Roth IRA contribution differs from a traditional IRA in that the contributions are made with after-tax dollars and there is no deduction available for those contributions at the time they are made. However, all earnings within a Roth account are tax free when withdrawn during retirement so this option could save you money over the long term if your tax rate remains consistent or lower than it was when you initially made the contribution.