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As it stands now, the Roth is a gift from the government. All contributions are made with after-tax dollars but ALL withdrawals, (gains and origianl dollars) can be made tax-free. That's right, tax-free. That's the simple explanation. There are some guidelines to be followed to avoid paying any tax but they are relatively simple and can be found at many mutual fund company web-sites.
Another little understood aspect of the Roth is that your original investment dolllars can be withdrawn at any time if needed.
With a regular IRA you can contribute pre-tax dollars but upon withdrawal all dollars will be taxed at ordinary income tax rates not capital gains rates. An important question to ask yourself is: What do you think the direction of future tax rates will be, down or up? If, like most of us, you think they will go up IMHO you should consider a Roth IRA.
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