Roth IRA
An individual retirement plan that bears many similarities to the traditional IRA, but contributions are not tax deductible and qualified distributions are tax free. Similar to other retirement plan accounts, non-qualified distributions from a Roth IRA may be subject to a penalty upon withdrawl. Investopedia Says:
A qualified distribution is one that is taken at least five years after the taxpayer establishes his or her first Roth IRA and when he or she is age 59.5, disabled, using the withdrawal to purchase a first home (limit $10,000), or deceased (in which case the beneficiary collects). Since qualified distributions from a Roth IRA are always tax free, some argue that a Roth IRA may be more advantageous than a Traditional IRA. Related Terms:
401(k) Plan
Extended IRA
Individual Retirement Account - IRA
IRA Adoption Agreement and Plan Document
Qualified Distribution
Roth 401(k)
Roth IRA Conversion
Spousal IRA
Tax Increase Prevention and Reconciliation Act of 2005 - TIPRA
Traditional IRA |