If you're just out of school with a salary in the low 30s, is it better to open a traditional IRA or a Roth IRA?
—John Coussa, Eastchester, N.Y.

Open a Roth. The big difference between the two is when you will pay taxes. With a Roth, you pay now: You fund it with after-tax earnings and withdraw money tax-free. With a traditional IRA, you pay later: Contributions are tax-deductible at your earnings level; withdrawals will be taxed as ordinary income.

You want to pay up when you think your tax rate will be lower, says Columbia, Md., financial planner Michael Kitces. A sub-$35,000 salary puts you in the 15% bracket; between raises and tax hikes, you'll most likely pay higher taxes later on, says Kitces. That's why young adults are "fantastic" Roth candidates, he says.

—Lisa Gibbs

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