Why Is A Roth IRA Tax Free?
225 POINTSview profileKyle MonahanIndependent Agent, Monahan Insurance, Orlando, FLRoth IRA's are not 'tax free'. They are simply not taxed at withdrawal after you have reached the appropriate age to be eligible and avoid penalties. The reason for this is because your contributions to a Roth IRA are done with after-tax dollars. You have already paid tax on the funds when they were earned originally. Because of this, you do not have to pay tax (again) when they are withdrawn.Answered on July 8, 2014flag this answer
37376 POINTSview profileDavid G. Pipes, CLU®, RICP®Business Development Officer, T.D. McNeil Insurance Services, Fresno, CaliforniaThe income tax free return on a Roth IRA is an incentive to save money for retirement. It is in this context that the IRS code allows the money to be income tax free. This includes not only the money that you have placed in the contract but any earnings made on that money. This is the idea that is being pushed by the President with his “My RA.”Answered on July 8, 2014flag this answer
21750 POINTSview profileJim WinklerCEO/Owner, Winkler Financial Group, Houston, TexasThat is a great question! Roth IRA's are excellent retirement savings vehicles. I think they should be a part of every retirement plan. When you make contributions to a plan, you make them either before income tax is assessed, or after the tax has been taken. Before tax, like your employer plan, means that the withdrawals are treated as income, and they are taxed then. After tax contributions, like your Roth, means that you have already paid your taxes, so the withdrawals are tax free. I hope that helps, thank you for asking!Answered on July 9, 2014flag this answer
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