What are Roth IRAs?
The Taxpayer Relief Act of 1997 created a new type of Individual Retirement Account (“IRA”) named after Senate Finance Committee Chairman, Senator William V. Roth, Jr. Roth IRAs offer an unparalleled tax incentive – while contributions to Roth IRAs are not tax-deductible (unlike traditional IRAs), all distributions from a Roth IRA are tax-free. What are the Advantages? Similar to traditional IRAs, the dividends and interest generated by a Roth IRA, are not taxed while they are accumulated in the IRA. However, Roth IRAs offer a significant bonus – tax-free withdrawals. Although contributions are not tax deductible, withdrawals at age 59 (earlier if you use it to buy a first home) are tax-free as long as it has been in the account for at least five years. And, there is no requirement to withdraw any money at age 70; and, upon death, beneficiaries will not owe any income taxes upon withdrawal. Facts on Converting Traditional IRAs to a Roth IRA You can convert all or part of your tradition
