Re:IRS delays tax-filing date to july 15, matching payment d...
by drdec on Friday March 20, 2020 @03:31PM
(#22640762)
No, a Roth IRA is funded with post-tax money. A traditional IRA is funded with pre-tax money.
Once you reach the correct age, money coming out of a Roth IRA is not taxed. Money coming out of a traditional IRA is taxed.
As GP noted, contributions to a Roth IRA may be withdrawn at any time without penalty or taxes. The gains from those contributions follow different rules however.
E.g. Suppose you put in $1000 to a new Roth IRA account with no other contributions. Suppose the account is worth $1500 today. You may withdraw the $1000 you put in with no penalties or taxes leaving $500 in the account.
Once you reach the correct age, money coming out of a Roth IRA is not taxed. Money coming out of a traditional IRA is taxed.
As GP noted, contributions to a Roth IRA may be withdrawn at any time without penalty or taxes. The gains from those contributions follow different rules however.
E.g. Suppose you put in $1000 to a new Roth IRA account with no other contributions. Suppose the account is worth $1500 today. You may withdraw the $1000 you put in with no penalties or taxes leaving $500 in the account.