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Should I Open A Roth Or A Traditional IRA?

When Will You Need the Money?

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Under a traditional IRA, you must begin withdrawing from your IRA the year after the year in which you turn age 70.

If you expect that you won't need the money at age 70 and will want to postpone withdrawing funds for as long as possible to avoid paying income taxes on it, then a Roth might be better for you.

If you think you might need to access the money in your IRA account and don't meet one of the conditions for penalty-free distributions, a Roth might be preferable. That's because, with a Roth, you can make withdrawals at any time and only have to pay penalties when you withdraw more than the amount that was initially deposited.

If, however, you are able to make a premature withdrawal due to disability, for work or medical expenses, or for a first-time home purchase, (see conditions for penalty-free distributions for details), either type of account will allow you to withdraw money without penalties. However, you will have to pay taxes on the entire distribution from a traditional IRA.

Edited by: Peg Downey, CFP, NAPFA
Money Plans
Silver Spring, MD

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