Though there are some hybrids, generally speaking, there are two major types of individual retirement accounts: the traditional variety, and Roth IRAs. With a traditional individual retirement account, contributions are made before you pay taxes on the income.
Taxation works in the reverse manner with a Roth IRA. Your deposits into a Roth individual retirement account would be made after taxes have been paid.
With both types of accounts, you can take penalty-free withdrawals when you are 59.5 years old. Since taxes were already paid, distributions that are taken from a Roth IRA would not be subject to regular income taxes. Conversely, you would have to pay taxes when you take money out of a traditional individual retirement account.
You are required to start taking mandatory minimum withdrawals when you are 70.5 years old if you have a traditional individual retirement account. There is no such requirement when you have a Roth IRA, because the IRS does not have to find a way to start to collect taxes on the contributions.