Differences From A Traditional IRA
In contrast to a traditional IRA, contributions to a Roth IRA are not tax-deductible. Withdrawals are generally tax-free, but not always and not without certain stipulations (i.e., tax free for principal withdrawals and the owner's age must be at least 59½ for tax free withdrawals on the growth portion above principal). An advantage of the Roth IRA over a traditional IRA is that there are fewer withdrawal restrictions and requirements. Transactions inside an account (including capital gains, dividends, and interest) do not incur a current tax liability.
Read more about this topic: Roth IRA
Famous quotes containing the words differences and/or traditional:
“I trust the time is nigh when, with the universal assent of civilized people, all international differences shall be determined without resort to arms by the benignant processes of civilization.”
—Chester A. Arthur (18291886)
“The very natural tendency to use terms derived from traditional grammar like verb, noun, adjective, passive voice, in describing languages outside of Indo-European is fraught with grave possibilities of misunderstanding.”
—Benjamin Lee Whorf (18971934)