But generally, you must be 592 and the withdrawal of savings and gains must not be made until after the fifth year, beginning with the year of your first contribution. A contribution to a Roth IRA is not deductible from income tax. But it is an excellent choice for building up funds for retirement, tax-free. Traditional IRAs are still a good choice for immediate tax savings. Remember, traditional IRAs allow you to deduct the contribution the year you contribute, if you qualify.
Tax is deferred until withdrawal - usually after retirement.
Then you generally are taxed on the total amount. For further details, consult your IRS tax instructions or your tax preparer. The graphics n these pages were gathered from various public domain sites on the internet. Feel free to download them for use in your own web pages or documents. The Howard University Libraries Staff Newsletter is published monthly.