TMFPixy:Kiri asked:<<<<<Is it really the case that these earnings are "tax-free"? Don't you have to pay taxes each year on any "unrealized gains" (or get a tax deduction from the losses) anyway? You aren't taxed *twice* on the earnings (once when you earn them and once when you withdraw them), but surely the government taxes them at least once.>>>>>"In a Roth, If the account has been open for at least five tax-years and if you are over age 59 1/2 when withdrawing the money, then everything returns to you free of taxes. Additionally, you pay no income taxes of any kind on the earnings within that account. They are allowed to compound free of taxes within the IRA until you take them out. As long as that's after five years and age 59 1/2, on withdrawal they won't be taxed."I hate to disput TMFPixy because he usually knows alot more than me for the topics discussed on this board, BUT Roth IRAs have only been available for a few years and no one knows when Congresss might diddle with the IRC again. Or maybe we will move to a consumption tax, so the dollars out of the IRA will be taxed when spent?Obviously, Pixy recites the current rules; and we can only operate using the current tax code. BUT, I also think that it would be foolish (1) to assume that the tax code will never change and (2) to not consider what those changes might look like. Roth IRA will look like a mighty inviting target, IMO.Last, I have no idea how Roth IRA withdrawals work in relation to the current taxation of SS benefits for those who are already retired.Regards, JAFO
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