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Roth IRA versus traditional IRA?
I've read about both kinds, but I don't understand the terms and language. I want something that will help with taxes now and that I can take money out of (penalty free) if I need it before I'm retired?
2 Answers
- 1 decade agoFavorite Answer
I am an expert on this subject & teach across the country. Email me for more info.
The only way to pull $ before 59 1/2 from a traditional IRA without penalty is for a 1st time home purchase, college education, disability, or certain medical expenses. In a ROTH you can pull your vested contributions out without penalty, but the interest gain you would be penalized for.
What is better, ROTH or Trad.? Email me.
- Anonymous1 decade ago
A Roth IRA is tax free earnings while a regular IRA is tax deferred on the initial investment. The Roth is taxed as regular income on the initial investment while the earnings are tax free. If you can, go Roth for the bigger advantage in the long run. I don't believe you can borrow from either type without a tax penalty. Ask at any bank.
Source(s): Retired CPA