A person can convert to a Roth IRA from a traditional IRA, and any money in the Roth IRA from the traditional IRA can be withdrawn penalty free. Granted the seasoning period of currently five years must have passed on the money converted. If a Roth IRA owner dies, their spouse will become the sole beneficiary.
If the spouse has a Roth IRA of their own then they can combine the two plans with no penalty. A person can make contributions to a Roth IRA even if they contribute to another retirement plan. This is also true of a traditional IRA but it may not be tax deductible.
A Roth IRA does not demand that withdrawals start at any specified age. In a traditional IRA at a specific age a person has to start taking out the minimal required amounts of money. In a Roth IRA if the money is not needed currently the full amount can be passed to an heir.
To the amount of $10,000 in lifetime earnings can be withdrawn tax free if used by the owner to buy a house for the first time. The house itself must be acquired by the owner, spouse, or direct ancestor. Any of the relatives receiving the home must not have owned a house in the last 24 months.
Listed above are some of the advantages to owning a Roth IRA account. To be remembered as with all retirement accounts there are disadvantages. Research should be conducted when deciding which plan is best for a specific individual.
- Basics of a Roth IRA Account (2011taxes.org)
- Learn Your Roth IRA Withdrawal Rules and Penalties (2008taxes.org)
The Benifits of a Roth IRA by Steve