Roth IRA

An Roth individual retirement arrangement (Roth IRA) is a personal savings plan which allows you to invest or set aside money for retirement, while offering you deferred tax / tax advantages. The Roth retirement plan under US law that is generally not taxed, as long as certain conditions are met. The US tax law allows reduction in tax on a limited amount of saving for retirement. Roth IRA's main difference from the majority of tax advantaged retirement plans is that, instead of granting a tax break for money placed into the plan, the tax break is granted on the money withdrawn from the plan during retirement.

"A Roth IRA is setup and funded by an individual; however, some employer/group plans can have Roth accounts. A Roth is unique in that it is funded with after-tax dollars, meaning the individual does not deduct the contribution from that year’s income taxes. He or she pays income taxes on the dollars earned and then contributes to the Roth. The benefit of this account type is that the distributions at retirement age are 100% tax-free. No income tax is claimed from the distribution."

Roth IRAs can be contain investments in securities, most often common stocks and bonds, typically through mutual funds. Roth IRAs also, less commonly, allow other investments, including real estate, derivatives, notes, certificates of deposit, and are possible). Roth IRAs also allow annuities bought from a life insurance company.

See Also

• Self-directed IRA and IRA, 401(k), Roth IRA, 403(b), Retirement, Social security
• Assets and Asset forfeiture
• Economic preparedness
• Invest in tangibles
• Stocks and Bonds
• Stock market
• Savings

External Links

• IRS Publication 590 (IRAs) (pdf)
• IRS ROTH IRA Publication 590
• http://survivalblog.com/letter-re-self-directed-ira/
• http://survivalblog.com/guest-post-self-directing-your-retirement-sheltering-the-fruits-of-your-labor-by-will-lehr/
• http://survivalblog.com/letter-re-self-directed-ira-article/
• Rothify Your 401(k) Forbes.com
• Humberto Cruz. "Traditional to Roth IRA conversions: Don’t be tripped up by tax implications", February 13, 2010.