Roth IRA Information


The Roth IRA was championed throughout the 1990s by Senator William Roth of Delaware. After several stumbles the enabling legislation became law in 1997 with the first contributions allowed in 1998.

Senator Roth's premise was to introduce a retirement account which was simple to operate and which would allow the average working person to save for retirement. Unlike a traditional account the funds available in a Roth would eventually be tax and penalty free.

As with many government programs the Roth law is convoluted and very difficult to understand. When the IRS wrote the regulations to implement the law they didn't help the situation.

Probably the most misunderstood rule is the 5 year requirement. I've heard a lot of people say "I don't want a Roth because I can't touch the money for 5 years." This observation is wrong. Roth annual contributions can be withdrawn at any time, regardless of one's age or the 5 year requirement without income tax or penalties. Why? Because of the screwball method Congress cooked-up for distributions. More on this and other provisions later.

To find out more about Roth accounts click on one of the topics below.

Go to Roth Eligibility
Go to Roth Contributions
Go to Roth Conversions & Recharacterizations
Roth Required Distributions
Go to Roth Taxation
Go to IRA Home Page