P.O. Box 632 Findlay, Ohio 45839 Phone: 419-420-9327

Finance
What is a Roth IRA?
By Mary Simmons
Apr 1, 2008, 20:21

The Roth IRA is an excellent way to save for your retirement. You make after-tax contributions. Then your savings grow tax-deferred and have the potential for income tax-free withdrawals.

Tax-deferred growth – Even though your contributions to a Roth IRA are made with after-tax dollars, those contributions and earnings grow tax-deferred more rapidly than they would in a
taxable account.

Tax-free withdrawals – If you meet certain requirements, you can withdraw
funds from your Roth IRA without paying any additional federal income taxes. This separates the Roth IRA from other IRAs. For this reason,
the Roth IRA can be especially beneficial for you if you expect to be in a higher tax bracket when you retire.

 If you expect to be in a lower tax bracket when you retire, you may benefit more from a
Traditional IRA

To qualify for withdrawals that avoid federal income taxes, you must hold the money in your Roth IRA for at least five tax-year periods (not necessarily five calendar years). In addition, one of the following events must occur:

• Reach age 591/2
• Become disabled
• Die
• Use the withdrawal for a first-time home purchase ($10,000 limit)

Remember IRA withdrawals made before age 591/2 may involve tax penalties. It’s wise to consult a tax or legal advisor before making any decisions. Your financial advisor can also help you determine if a Roth IRA is right for you.

Your local
Modern Woodmen
representative is:

Mary Simmons* FIC
1431 E. Main Cross St.
Findlay, OH 45840
419-422-9106