Roth IRA

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Roth IRA

 (ī′är-ā′)
n.
A modified individual retirement account in which a person can set aside after-tax income up to a specified amount each year. Earnings on the account are tax-free, and tax-free withdrawals may be made after age 59 1/2 .

[After William Victor Roth, Jr. (1921-2003), US congressman.]
American Heritage® Dictionary of the English Language, Fifth Edition. Copyright © 2016 by Houghton Mifflin Harcourt Publishing Company. Published by Houghton Mifflin Harcourt Publishing Company. All rights reserved.

Roth IRA


n.
an individual retirement account in which investments are made with taxable dollars, but withdrawals are tax-free after age 59 1/2.
[1997; after William V. Roth, Jr., senator from Delaware]
Random House Kernerman Webster's College Dictionary, © 2010 K Dictionaries Ltd. Copyright 2005, 1997, 1991 by Random House, Inc. All rights reserved.
References in periodicals archive ?
A conversation about a charitable gift annuity can occur from many angles, but the most attractive angle is when you can talk about it in the same breath as an IRA Roth conversion.
TABLE D DEDUCTIBLE IRA ROTH IRA Investment $4,000 $4,000 Tax Savings @ 28% $1,120 -0- Net Outflow $2,880 $4,000 Earnings @ 8% tax deferred $1,877 $1,877 Value in 5 years $5,877 $5,877 Tax on Withdrawals $1,646 -0- Net Cash Increase $1,351 $1,877 Present Value @ 3% if withdrawn in 5 years $747 $1,039 Present Value @ 3% if withdrawn over the next 5 years $1,081 $1,501 Present Value @ 3% if withdrawn over the next 10 years $1,501 $2,084
Regular (deductible) IRA Roth IRA Contribution tax rate 28% 28% 28% 28% Withdrawal tax rate 15% 28% 31% tax-free Amount contributed $2,000 $2,000 $2,000 $2,000 Tax savings ($2,000 x 0.28) 560 560 560 0 Tax savings fund (after 10 yrs.) 1,136 1,122 1,119 0 IRA fund 5,187 5,187 5,187 5,187 IRA taxes (at Withdrawal) 778 1,452 1,608 0 Net assets $5,545 $4,857 $4,698 $5,187