Did you know that the
Roth IRA was established by the Taxpayer Relief Act of 1997 and named for its
chief legislative sponsor, Senator William Roth of Delaware? Traditional IRA’s
had been around since 1974 but this new investment vehicle was different.
A
Roth individual retirement plan or Roth IRA is a savings account that lets
qualified individuals invest after-tax money for retirement. Earnings on the
contributions are tax free if withdrawn after retirement age of 59 1/2, if the
money is kept in the account for five consecutive years. That makes Roth IRAs
ideal savings vehicles for young, lower-income workers who won’t miss the
upfront tax deduction and who will benefit from decades of tax-free, compounded
growth. Roth IRAs also appeal to anyone who wants to minimize their tax bite in
retirement as well as older, wealthier taxpayers who want to leave assets to
their heirs tax-free. Is a Roth IRA right for you?
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