Every year, millions of taxpayers face the same dilemma: whether their new IRA should be Roth or traditional. Many taxpayers like the idea of taking immediate deductions for contributions to a traditional IRA, while others would prefer to make taxable contributions to a Roth and watch the money grow tax-free.

The question may have an easy answer depending on the individual's income. Even wealthy individuals can qualify to contribute to a Roth IRA (the income cap is $150,000 for married couples and $95,000 for individuals), while qualifying for a traditional IRA is more difficult ($62,000 for couples and $42,000 for singles).

For those who qualify for both, the first consideration when deciding which type of IRA to choose is tax bracket, both current and future. For those expecting to be in a higher tax bracket in retirement than they are now, a Roth IRA may be the best choice. But a traditional IRA may be better for those who are in a higher tax bracket now than they expect to be in retirement.

Then again, the individual must also consider the amount of time he or she has left before retirement. For younger investors who have perhaps 15 years or more, a Roth may make more sense because it will allow the assets to grow tax-free for a long period. Also, Roth IRAs, unlike traditional IRAs, are not required to make minimum distributions when their owners reach 70½, and they can be passed on to heirs without incurring income taxes.

Of course, each individual's circumstances and retirement goals require unique planning strategies. Be sure to consult a qualified professional before making any IRA decisions.