What is a roth ira?
A Roth IRA is an individual retirement account started in 1997 to help ease strain on the social security system.
There are many common traits between the regular IRA and the Roth IRA, and it is important to know the differences between them when deciding which to use.
The funds contributed to a traditional IRA are tax deductible meaning that you can deduct the amount you contribute to the fund from your income while filing your tax return papers. In a Roth IRA you are not able to deduct the contributions from your income.
Another main difference to consider is that the penalty free withdrawal allowances in the traditional IRA are very few and far between. And they are only allowed under very specific circumstances.
In a Roth IRA you are allowed to withdraw any funds contributed after a five year "seasoning" period.
The loose rules of the Roth IRA account make it a perfect candidate for an emergency fund. After the seasoning period of 5 years, you can use the fund to cover any unexpected costs and expenses.
It is important to pay attention to your personal circumstances befpre diciding how to plan for your retirement.
There are many common traits between the regular IRA and the Roth IRA, and it is important to know the differences between them when deciding which to use.
The funds contributed to a traditional IRA are tax deductible meaning that you can deduct the amount you contribute to the fund from your income while filing your tax return papers. In a Roth IRA you are not able to deduct the contributions from your income.
Another main difference to consider is that the penalty free withdrawal allowances in the traditional IRA are very few and far between. And they are only allowed under very specific circumstances.
In a Roth IRA you are allowed to withdraw any funds contributed after a five year "seasoning" period.
The loose rules of the Roth IRA account make it a perfect candidate for an emergency fund. After the seasoning period of 5 years, you can use the fund to cover any unexpected costs and expenses.
It is important to pay attention to your personal circumstances befpre diciding how to plan for your retirement.
posted by Credit Counseling at
6:17 AM
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