Actions

  Print Article
  BookMark Article

Categories    Category List

  Advice
  Aging
Arts
  Arts And Crafts
  Ask An Expert
  Automotive
  Banking
  Break-up
  Budgeting
Business
  Business Management
  Cancer Survival
  Career
Cars And Trucks
  Casinos
  Causes And Organizations
  Cell Phones
  Cheating
  College And University
Computers
  Computers And Technology
Cooking
Crafts & Hobbies
  Culture
Culture And Society
Current Affairs
  Dating And Relationships
  Death
Disease & Illness
  Domain Names
  Drop Shipping
  E-Commerce
  Electronics
Entertainment
  Environment
  Etiquette
  Ezines And Newsletters
  Family Concerns
Fashion
  Fiction
Finance
  Finances
  Financial Planning
  Food And Drinks
  Forums
  Gadgets And Gizmos
  Gambling
Gardening
Health & Fitness
Home
Home & Family
  Home Business
  Home Improvement
  Home Management
  Human Resources
  Import Export
  Infants And Toddlers
  Innovation
  Inspirational
  Insurance
  Intellectual Property
Internet
Internet Business
  Jobs
  K-12
  Medical Business
  Medicines And Remedies
Men Only
  Motivational
Motorcycles
  Nature
  Opinions
Our Pets
  Personal Development
  Pets And Animals
  Podcasting
  Pregnancy And Family Pla
  Presentation
Product Reviews
  Quotes
  Recreation
Recreation & Sports
  Recreation And Leisure
Reference & Education
Relationship
  Religion And Spiritualit
  Screenplay
  Search Engines
  Self Help
Self Improvement
  Selling
  Shopping
  Short Stories
  Society
  Speaking
  Sports
  Structured Settlements
  Supplements And Vitamins
  Team Building
  Technology
  Telecommuting
  Telesales
  Television
  Tools & Resources
  Travel
Travel & Leisure
  Video
  Web Development
Weddings
  Wellness, Fitness And Di
  Womens Interest
  Work Life Balance
  World Affairs
Writing & Speaking

Online Now    Online Now

Guests Online (110)

Baiduspider (29)

Bing (4)

Googlebot/2.1 (3)

Baiduspider (1)

Bing (1)

Author Login    Author Login

Welcome Guest! Please login or create an account.

Username:

Password:



If you do not have an account yet, you can register ( Here ), or you may retrieve a lost user/pass ( Here ).

Navigation    Navigation

   10 newest articles RSS

Author Highlights    Featured Author

Ben Smith
city

View My Bio & Articles


Julius Arevalo
New York

"Promotional Consultant"

View My Bio & Articles


Carmour Tan
city

View My Bio & Articles


DisclosureDisclosure

You should assume that the owner of this website is an affiliate for the provider of goods/services mentioned on this website. Sometimes the owner may get paid a commission if you purchase the product when following a link.

How The Roth IRA Works

Author : Jerry Glynn

Submitted : 2008-10-29 00:00:00    Word Count : 499    Popularity:   56

Tags:   invetments, ira rollover, ira investing, Individual Retirement Account, finance, mortgage, money,

Author RSS Feed   Author RSS Feed

Roth IRAs are types of Individual Retirement Accounts or IRAs that are allowed under tax laws of the United States. The plan is named after its chief legislative sponsor, Senator William Roth, and it has a lot of significant differences from other IRAs.

Just as with any other type of IRA, Roth IRAs have a number of specific eligibility and filing status requirements as mandated by the Internal Revenue Service. The main advantage of this plan is of course its tax structure. Depending on how you set up a Roth IRA, it can be used in many different ways, including the investment of funds in non-typical assets or Self-Directed IRAs.

Differences between Roth IRAs and traditional IRAs
Unlike traditional IRAs, contributions to Roth IRAs are not tax-deductible, although withdrawals are free from taxes. One distinct advantage of Roth IRAs over traditional IRAs however is that there are far fewer restrictions and requirements with regard to withdrawals. Furthermore, all transactions inside a Roth IRA accounts including capital gains, dividends, and interests are not subjected to current tax liabilities. Withdrawals are also generally free of taxes if the account has been in existence for at least 5 years and the age of the owner is above 59 .

Advantages of Roth IRAs
If there is some money left in the account due to conversion from a Traditional IRA, the owner of the Roth IRA has the option to withdraw the total of the converted amount, as long as the "seasoning" period (typically five years) has passed since the conversion of the funds.
Any earning withdrawals become tax-free once the owner reaches the age 59 or becomes disabled, as long as the account has been in existence for five years or more.
Direct contributions to a Roth IRA can be withdrawn at any time with no additional taxes or penalties incurred.
Contributions can still be made to a Roth IRA even if the owner is already signed up with a qualified retirement plan such as a 401(k).

Disadvantages of Roth IRAs
The primary disadvantage of a Roth IRA compared to a traditional IRA is that members contributions are not tax-deductible. With a traditional IRA a member can contribute $1000 and receive a tax deduction while being in a higher tax bracket, and thereby reduce his or her costs of contributing.
The contribution limit has largely been phased out depending on the contributor's income.
The tax benefit may never actually be realized with a Roth IRA, since the person may not live to retirement age or much longer than that. In this particular scenario, the tax structure of a Roth IRA only has the function of reducing an estate that may not have been subjected to taxes to begin with. What this means is that in order to gain the full tax benefits of a Roth IRA, the owner must live until all of the contributions have been withdrawn and used up.

Author's Resource Box

For more information about the roth ira, please visit IRA Cash Flow.

Article Source:
www.1ArticleWorld.com

 

  Report Article
Badly Written Offensive Content Spam
Bad Author Links Mis-spellings Bad Formatting
Bad Author Photo Good Article!