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Finance For Dummies

Finance For Dummies offers personal finance information on investing, retirement investing, finance, insurance, credit cards, loans and more. Personal finance education is our goal.

Saturday, April 22, 2006

Traditional IRA and Roth IRA

Roth IRA
  • You never have to take minimum distributions
  • Distributions are not subject to income tax as long as the Roth is open for at least 5 years and the holder is at least 59 1/2 years old.
  • Heirs must take contribution, but they do not owe taxes
Traditional IRAs
  • If you are 70 1/2 or older you are required to take minimum withdrawals (a.k.a. distributions).
  • You are taxed on your distributions
  • When the account holder dies the heirs must take withdrawals and pay income tax on that money.
For more information on how to decide which IRA is for you go to:
www.smartmoney.com/retirement/roth/index.cfm?story=whichira


1 Comments:

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