Retirement - Links
A Roth IRA is similar to the traditional IRA but it offers tax free, rather than tax-deferred, investment earnings. If you qualify, you may contribute up to $3,000 a year to a Roth IRA. These contributions are not deductible, but on the other hand you may access to them at any time. After you've had a Roth IRA for at least five tax years, you may withdraw your investment earnings tax free if:
- you are at least age 59 1/2
- you make the withdrawal in a year that you have paid qualified first-time home buying expenses (up to $10,000 lifetime cap), or
- you become disabled.
After the five-year waiting period has been met, distributions from the account to your beneficiaries or estate at or after your death also would be income tax free. A traditional IRA may be converted to a Roth IRA if certain requirements are met. Other rules and an income-based phase-out apply.
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