The most important thing to know is this: Contributions (that is, the money that you put into your Roth) can come out at any time, free of taxes and penalties.When it comes to distributions of , however, things get a bit more complicated.
For example, if an individual established a Roth IRA at ABC Brokerage in 2012, and established a second Roth IRA at XYZ Brokerage in 2013, the five-year period begins year 2012.
In other words, you want to have the highest amount of money left over after income taxes are paid.
For taxable retirement savings (basically any money held outside of a tax-deferred retirement account set aside for retirement purposes), capital gain tax rates are lower than ordinary income tax rates.
The Roth IRA, on the other hand, allows qualified distributions to be free from tax and penalties.
Here we review the tax treatment of Roth IRA distributions.