The creation of the Roth IRA in the taxpayer Relief Act of 1997 provides a new savings option that offers tax—free retirement earnings with considerable benefits over traditional IRAs.

The Roth difference
T he Roth IRA allows annual nondeductible contributions of up to $2,000 ($4,000 for couples). Unlike a traditional IRA, which allows your contributions to grow tax—deferred until you withdraw them, withdrawals from your Roth IRA are tax—free, if you have held your account for five years or more and have reached, age 59 1/2.

The Roth IRA also offers:
• Increased access to your money After five years. the Roth IRA allows you the flexibility to make withdrawals of tip to $10,000 for the purchase of a first home or unlimited withdrawils for qualified higher education costs, Without an  IRS penalty.

• No withdrawal deadline. Unlike its traditional counterpart, the Roth IRA does not require distributions after age 70 1/2. You can simply allow your funds to grow and upon death you can pass your savings on to your spouse or children, who can then receive funds tax-free. You can even continue to make contributions or open a new Roth IRA after age 70 1/2.