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Roth IRAs

Roth IRAs


A Roth IRA is an individual retirement plan; it can be either an account or an annuity. A Roth IRA is similar to a traditional IRA, except for the following differences.

A Roth IRA can be set up and contributed to at any time in the individual’s life, while a traditional IRA can only be contributed to before age 70.5. The contributions made to a Roth IRA are also not tax deductible. However, the distributions from the Roth IRA are tax free, as long as the distributions are made at least five years after the first contribution to the Roth IRA was made, and as long as the payment or distribution is made on or after you reach age 59.5. The distributions may be made at an earlier age if you are disabled; however, the five year waiting period still applies. The distributions may also be made to a beneficiary or to your estate after your death, although the five year waiting period applies to this as well. Furthermore, if you are the original owner of the Roth IRA, you are never required to take contributions, unlike a traditional IRA, which requires you to take contributions after you turn 70.5.

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