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Author: phyburoptik Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 75379  
Subject: Taxes Date: 2/28/1999 3:07 AM
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This year I started a Roth IRA thinking the contribution would be tax deductable. Now that tax season is here, I've read that it isn't. So, now I'm trying to figure out what the point of having a Roth IRA is. The only difference I see between a Roth IRA and say...a regular mutual fund, are just more restrictions on the IRA. I know I must be missing something somewhere. I've read several articles throughout your site, and your message board.....I just don't see an advantage. I would greatly appreciate any clarifcation that you can give me. Thanks!
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Author: peppermintpatty Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 8851 of 75379
Subject: Re: Taxes Date: 2/28/1999 7:42 AM
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phyburoptik: The payoff with the Roth/IRA is in the end... NO TAX DUE on withdrawn funds! While you sacrifice a deduction when you contribute, you get a great reward. Ask your provider to send you more info on the Roth - it should boost your attitude! PP

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Author: TMFPixy Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 8866 of 75379
Subject: Re: Taxes Date: 2/28/1999 12:03 PM
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Greetings, Phyburoptik, and welcome. You wrote:

<<This year I started a Roth IRA thinking the contribution would be tax deductable. Now that tax season is here, I've read that it isn't. So, now I'm trying to figure out what the point of having a Roth IRA is. The only difference I see between a Roth IRA and say...a regular mutual fund, are just more restrictions on the IRA. I know I must be missing something somewhere. I've read several articles throughout your site, and your message board.....I just don't see an advantage. I would greatly appreciate any clarifcation that you can give me. >>

The advantage is tax deferred growth coupled with ultimate tax-free withdrawal. It stands head and shoulders over a nondeductible traditional IRA and taxable accounts. For details, see my analysis on this board at http://boards.fool.com/Registered/Message.asp?id=1040013000441002&sort=postdate and the IRA discussion in my Foolish Retirement Planner available at http://www.fool.com/retirement .

Regards…..Pixy



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Author: x4a54 Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 8871 of 75379
Subject: Re: Taxes Date: 2/28/1999 12:54 PM
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i'd disagree with "head & shoulders" over the others..

each sort of account (Roth, trad.IRA, taxable, 401(k))
have their advantages and disadvantages...

advantages of Roth:
since you pay tax on what goes in, you pay NO TAX on what comes out (unless, as some cynics suspect , Congress changes its "mind" before you get old enough.
much less restrictions wrt. withdrawals that other tax-advantaged accounts.
slightly less restriction on contributions than trad.Ira

disadvantage:
limitation on contribution amt.


jp


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