Roth IRAs and traditional IRAs have some significant differences. Roth IRA distributions are tax-free as long as you begin withdrawing funds after you are 59 1/2 and have had the account for at least five years. However, unlike traditional IRAs, contributions are not tax-deductible when you make them.
Traditional IRA contributions are deductible if you meet certain criteria, but distributions are taxable at the rate in effect for ordinary income and must begin by April 1sfollowing the year you turn 70 1/2. Because of the significant economic turmoil in 2009 Congress waived the Required Minimum Distributions (RMDs) for 2009.
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