Jan 22

4 comments so far...

  • jeff410 Said on January 22nd, 2010 at 8:20 pm:
  • dash Said on January 22nd, 2010 at 8:57 pm:

    Basically – A trad IRA is funded pre tax and a roth IRA is funded after tax

  • pumpdatiron Said on January 22nd, 2010 at 9:04 pm:

    In addition to other answers, the best advantage for Roth is withdrawals are tax free. That’s a huge advantage.

  • walt17jr Said on January 22nd, 2010 at 9:21 pm:

    Traditional IRA: The deposits are deducted from your taxes, so you get the tax advantage when you put money into the IRA. You pay taxes when you take the money out. If you withdraw money before age 59 and a half there is a 10% penalty.

    ROTH IRA: You do not get any tax savings when you make deposits. But when you withdraw the funds at retirement they are tax free. You can withdraw your deposit (not earnings) without penalty at any time.

    As mentioned, IRS publication 590, will give you a full description of regulations relating to each.

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