There are no tax deductions at the beginning with a Roth IRA, but withdrawals are tax-free. If you convert to a Roth IRA, you must pay income tax, but no early withdrawal penalty, on the amount you convert. For conversions in 1998, the income can be spread over four years. If you are married and file your tax returns separately, you cannot convert. The advantages of the Roth IRA are lower estate taxes, lower social security taxes and withdrawals without tax or penalty.
Withdrawals are tax-free as long as the money is used for higher education.
Otherwise, withdrawals of earnings are generally taxed and subject to a 10 percent penalty.