Profits and income from investments are not taxed until you retire and begin withdrawing funds. You will still benefit by opening an IRA even if it is not fully deductible. Your profits and income from investments will not be taxed until you begin withdrawals no later than 70 years of age. For both the deductible and non-deductible IRA, you will face a 10 percent penalty, plus taxes, if you withdraw funds before you are age 59 unless it's for extraordinary medical expenses. There is no tax deduction per se for Roth IRAs.
Contributions are made with money that has already been taxed, so there is no immediate tax break.
But when Roth money is taken out, it is a tax-free distribution. This type of IRA is ideal for individuals who may be in a lower tax bracket now but anticipate being in a higher tax bracket at retirement. You cannot take a distribution without penalty until at least five years after your first contribution. Distributions without penalty can be taken after age 59 . If you are a first-time homebuyer or become disabled, you can take distributions earlier.