What is an IROTH?

Question

I'm considering retirement options and briefly spoke with a financial planner who had mentioned an IROTH(?). What is an IROTH or am I misspelling?

Answer 1

I believe you are talking about a ROTH IRA. This type of IRA is one where you will not have to have taxes imposed on any money you take out after you have retired. Also, I believe it is 5 years from its inception you can withdraw any money you have deposited but only that money without any penalty no matter what your age. If you have a regular IRA now you can convert it to a ROTH but you will have to pay taxes at that time on any converted, but never again will you pay taxes on it and it can grow while in the IRA.

Answer 2

Roth IRA's are good because you are paying the income taxes on them now while you are working, as with a traditional IRA you pay income tax on the money when you withdraw it and at that time most people are retired and this hurts a little more to have to pay taxes when you are not working. I don't know if I believe the previous poster about withdrawing 5 years after it's been opened, I never heard that, but it could be true, just check into it. Most IRA's won't let you withdraw without penalty until you are 59.5 yrs old, this includes Roth IRA's.