Annuity Payments Using a Roth IRA Are Tax-Free
Additionally, heirs to http://www.cnn.com/ Roth accounts can stretch withdrawals, generally tax-free, across their life expectancies. To withdraw earnings without a penalty, you typically must hold the account for five years and be at least 59- years old. Some alternative ways to qualify are listed in the Internal Revenue Service's Publication 590, Individual Retirement Arrangements, at www.irs.gov . It also spells out the holding rules for assets converted from other accounts. Roths have been available only since 1998, so many accounts are relatively small. But starting Jan.
(The main drawbacks: Once you hand over your money to the insurer, you generally can't get it back. And your fixed payments might not keep up with inflation.) With a Roth IRA, any withdrawals are voluntary and generally come out tax-free, as long as you meet certain requirements. And heirs to Roth accounts can stretch withdrawals, generally tax-free, across their life expectancies. You can withdraw your contributions at any time with no penalty or tax. But to withdraw earnings without a penalty, you typically must hold the account for five years and be at least 59½ years old.