Should I Open a Roth?

Everyone not eligible for a deductible IRA should give serious consideration to the Roth.

Contributions to a Roth IRA may be removed before age 59 1/2 without taxes and without penalty, provided the Roth IRA was started at least five years prior. Consider a middle age couple with a 10 year old son. They have some savings, not earmarked for anything in particular. They should consider moving as much of this money as possible to a Roth IRA. If, when the child decides to go to college, they need more money, they can withdraw the contributions without taxes and without penalty. Whatever growth they have experienced in the account can be left to continue to grow until age 59 1/2, at which time they can withdraw the entire balance tax free.

Another example: consider a retiree over age 70 1/2 who is making mandatory withdrawals from their deductible IRA. Why not move some of this money back into a Roth IRA?

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