Roth IRA » roth ira http://www.rothira.net Roth Individual Retirement Accounts Mon, 29 Sep 2008 22:28:04 +0000 http://wordpress.org/?v=2.9.2 en hourly 1 How is a Roth IRA Different? http://www.rothira.net/how-is-a-roth-ira-different/ http://www.rothira.net/how-is-a-roth-ira-different/#comments Mon, 29 Sep 2008 22:23:52 +0000 admin http://www.rothira.net/?p=21 Think of a Roth as the mirror image of a regular IRA or 401(k): Instead of collecting a tax benefit up front, you get your break at the back end. When you fund a traditional IRA, you can take an immediate tax deduction on your contributions, but you then pay income taxes when you pull your money out. When you open a Roth IRA you’re not entitled to a deduction, but you can withdraw all your money, including earnings, tax-free. The Roth 401(k) works the same way.

Mathematically, there’s no difference between getting a tax break at the beginning or end. All else being equal, you end up in the same place whether you pay taxes at the outset or in retirement.

]]> http://www.rothira.net/how-is-a-roth-ira-different/feed/ 0 Roth IRA http://www.rothira.net/roth-ir/ http://www.rothira.net/roth-ir/#comments Wed, 26 Mar 2008 23:36:56 +0000 admin http://refinance.net/wpcheck-adsense/?p=1 Roth IRA is an individual retirement arrangement that, except as explained below, is subject to the rules that apply to a traditional IRA. It can be either an account or an annuity. Individual retirement accounts and annuities are described in Traditional IRAs.

To be a Roth IRA, the account or annuity must be designated as a Roth IRA when it is set up. A deemed IRA can be a Roth IRA, but neither a SEP-IRA nor SIMPLE IRA can be designated as a Roth IRA. Unlike a traditional IRA, you cannot deduct contributions to a Roth IRA. But, if you satisfy the requirements, qualified distributions (defined in Publication 590) are tax free. Contributions can be made to your Roth IRA after you reach age 70 1/2 and you can leave amounts in your Roth IRA as long as you live.

Details about Roth IRAs are contained in Publication 590, Individual Retirement Arrangements (IRAs) and include:

  • Setting up your Roth IRA
  • Contributions to your Roth IRA; and
  • Distributions (withdrawals) from your Roth IRA.

Investing basics and lots of other tips are included at Get the Facts: The SEC’s Roadmap to Savings and Investing, information provided by the Securities and Exchange Commission.

“Managing Your IRA” video – a discussion on basic principles of investing. (3:00 min.)

Taxation of pension income – including distributions from Roth IRAs – is covered at Link and Learn Taxes, a self study course on the IRS web site.

More IRA Resources

Web Site Resources

  • FirstGov.gov is a one stop portal to access all federal government public web sites.
  • The latest retirement plan information can be found at www.irs.gov/ep.
  • General tax information for individuals and businesses is located at www.irs.gov.
  • Other retirement plan information can be found on the Department of Labor’s Employee Benefits Security Administration (EBSA) site.
  • The Social Security Administration site has information on your Social Security retirement benefit to help you plan your retirement savings strategy.
  • The Securities Exchange Commission (SEC) has many publications on investing and more.
  • The Federal Deposit Insurance Corporation (FDIC) site explains how to determine whether your IRA account is covered by deposit insurance.
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