Tax-free is always better than tax deferred. So if you stashed your retirement funds in a Roth IRA account, you can collect tax-free cash while enjoying your retirement.
Even better, with a Roth IRA, you don't need to take minimum required distributions once you reach age 70 1/2, as you must do with a traditional IRA or SEP account. With a Roth, you can continue earning tax-free income for as long as you wish.
Also, when a Roth IRA owner dies, neither his estate nor his heirs will typically owe any federal income taxes on subsequent withdrawals.
Two key rules: You can only start taking federal-income-tax-free withdrawals from a Roth IRA after you owned the account for at least five years and you've reached age 59 1/2.
Lower tax rate cuts conversion cost
The one quick way to pour lots of dough into a tax-free Roth account is by converting an existing traditional IRA into a Roth IRA. But the conversion, ...(register to read more)
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