Roth IRA Advantages

The Roth IRA account can be a great savings vehicle for retirement. You can have either an old-style IRA or a Roth or both, but you still have a $2,000 annual ceiling. You can have a Roth regardless whether you have a retirement plan at work and regardless of your age. Your income level, however, can make you ineligible. If your adjusted gross income - basically your income before taking deductions and exemptions - is more than $95,000, on a single return or $150,000 on a joint return, your right to a Roth is gradually phased out. The downside of a Roth is that you can’t deduct contributions to it. But your reward for forgoing the write-offs far outweighs the cost. Once you’re 59 ½ years old and the account has been open at least 5 years, you can withdraw as much as you want tax-and penalty-free. That’s the retirement side of this IRA.

Source: Kiplingers - May 98

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