Here's part 5 of a piece from Yahoo titled ten must-know IRA terms:
Roth IRA -- The most notable thing about a Roth is withdrawals are tax-free if the account has been open for at least five years and you're at least 59 ½ when you start to withdraw money. Contributions to a Roth are not tax-deductible. "You can withdraw your contributions anytime you want, no penalty or taxes," says Picker. You can also withdraw earnings for a qualifying event if the account is at least 5 years old. Qualifying events include: death or disability of the account holder and a first-home purchase.
Tax and penalty-free withdrawals -- You can take money out of your IRA tax-free and penalty-free as long as you repay the full amount within 60 days, but may only do it once in a 12-month period. The withdrawal proviso was intended to make IRAs portable, says Picker."It's not for short-term loans." But some account holders use the rule to make loans to themselves. And many financial planners caution against it. The situation is "fraught with the potential for missing the deadline, not having the money and having a taxable event," says Peggy Kabaniss, CFP, and president of the National Association of Personal Financial Advisors. A short-term IRA loan "would be my last resort," she says.
For more information on saving for retirement, see these posts:
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