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Roth IRAs

Is now the time to hop on the Roth IRA train?

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Although Roth IRAs have been around for a few years, some taxpayers are still spooked by this newfangled version of the traditional IRA. As you'll see, 2005 may be an especially good year to look at different ways you can put money into a Roth IRA before year-end.

Roth IRA basics

With traditional IRAs, you can deduct contributions to the IRA on your tax return, assuming your adjusted gross income (AGI) isn't too high. Roth IRAs are never tax deductible, but they offer an even better deal: Qualified withdrawals from your Roth IRA are 100 percent free from federal income taxes, so you gain a big tax benefit on the back end, after all the earnings have built up.

What's a "qualified" withdrawal? It's one in which your Roth IRA has been in existence for at least five years and is made for one of these three reasons:

• After you've reached age 591/2.

• Death or disability.

• First-time home purchase (up t...(register to read more)

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