tax benefit of roth ira contribution
Benefits of a Roth IRA. 1  Withdrawals of earnings are free from federal income tax, provided the Roth IRA has been in existence for five years and you are at least 59Â½. 2  Contributions can be withdrawn anytime without federal income taxes or penalties.3  RMDs (Required Minimum Distribution) are not required. Roth IRA is an individual retirement account that offers the opportunity for tax-free income in retirement. Annual contributions are taxed upfront and all earnings are federal tax-free when they are distributed according to IRS rules. This is much different than a Traditional IRA, which taxes withdrawals.