Individual Retirement Accounts » Roth IRAs

Why a Roth IRA?

As mentioned above, the Tax Reform Act of 1997 has provided favorable tax treatment for saving for retirement. While an individual can deposit money on an after-tax basis into a Roth IRA and have the money grow tax-deferred, Withdrawals of earnings and converted amounts can be taken from a Roth IRA TAX-FREE and PENALTY-FREE if the following conditions exist:

1. After age 59-1/2 or;
2. Death or;
3. Disability or;
4. First Time Home Purchase

And

5.	The distribution is made more than 5 years after the initial contribution (The 5 year aging period begins January 1st in the year of the initial contribution no matter when the contribution is made.)

Distributions of earnings based on a qualifying event, but less than 5 years, will not be subject to the penalty but may incur normal ordinary taxation. Contributions to a Roth IRA may be withdrawn tax-free and penalty-free at any time.