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Ask The Expert - November 2017

by Stacy Wise | Nov 17, 2017
Traditional vs Roth IRA

Question: 
What separates a Roth IRA from a traditional IRA?

Answer: With a Roth IRA, unlike a traditional IRA, all taxes are paid when the IRA is established; your Roth IRA contribution is not deductible. However, qualified distributions from Roth IRAs are tax-free. Neither the principal nor the gain is reported as income. To be “qualified,” distributions must be received after the five-year period, beginning with the first tax year the individual made a Roth IRA contribution, and meet one of these criteria:

• received after the age of 59 1/2; or
• received to a beneficiary due to death; or
• received due to disability; or
• received for a first-time home purchase.

Future tax laws can change at any time and may impact the benefits of Roth IRAs. We suggest that you discuss your specific tax issues with a qualified tax advisor.

Call 877-647-5050 or schedule a meeting with a Personal Banker today and let us help you pursue your retirement goals!

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