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:
“What strikes many twin researchers now is not how much identical twins are alike, but rather how different they are, given the same genetic makeup....Multiples don’t walk around in lockstep, talking in unison, thinking identical thoughts. The bond for normal twins, whether they are identical or fraternal, is based on how they, as individuals who are keenly aware of the differences between them, learn to relate to one another.”
—Pamela Patrick Novotny (20th century)
“Americans want action for their money. They are fascinated by its self-reproducing qualities if it’s put to work.... Gold-hoarding goes against the American grain; it fits in better with European pessimism than with America’s traditional optimism.”
—Paula Nelson (b. 1945)