Roth IRAs offer tax-free retirement income — but for some retirees, a traditional IRA saves more money

There are a lot of tools to help you save for retirement: from personal savings to workplace plans to brokerage accounts. For many Americans, putting money aside in an individual retirement account (IRA) is part of their long-term savings strategy.

A Roth IRA can be particularly appealing: Since you contribute after-tax dollars, your withdrawals in retirement are tax-free. Plus, your investments grow tax-free, too.

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Another bonus? With Roth IRAs, you don't have to take required minimum distributions (RMDs) when you turn 73, so you have tax-free cash at your disposal whenever you need it in retirement.

On the other hand, contributions to traditional IRA are tax-deductible. So you pay the tax later, when you withdraw the money in retirement. You can start making withdrawals at age 59 ½, but if you need that cash sooner, you'll have to eat a 10% penalty and pay taxes.

Still, for some retirees, a Roth IRA, even though it provides tax-free income in retirement, may not be the best savings tool. Here's what to consider before you invest.

When a Roth IRA may not be the best option

The main reason you might not want to consider a Roth IRA is if you're currently in a high tax bracket. If you're looking to reduce your tax bill for the year, then a traditional IRA could help with that by lowering your taxable income.

If you expect your taxable income to drop in retirement, you might want to benefit from those tax breaks now through a traditional IRA. On the other hand, if you expect to be in the same tax bracket in retirement, then a Roth IRA could still make sense.

Another consideration is if you plan on making charitable donations in retirement. With a traditional IRA, you can transfer money directly to an eligible charity through Qualified Charitable Distributions (QCDs).

With traditional IRAs, you'll need to start taking required minimum distributions (RMDs) by April 1 of the year after you turn 73, and then by Dec. 31 each year onward. The amount you need to withdraw is based on your account balance from the prior year and your life expectancy.

You can use QCDs to take your required minimum distributions and avoid paying taxes at the same time. That's because a QCD made from a traditional IRA is excluded from taxable income.