Roth IRA taxes
Right, unless you want to withdraw money ahead of time -
that is, prior to your retirement age.
You can withdraw the money you put in, as I understand
it, at any time, tax free - but if you withdraw money
that developed from interest or gains in the account
ahead of the allowed time frame, then you have to pay
taxes on that portion. (I'm not a tax expert nor a CPA -
just my understanding of this.) Once you reach retirement
age, it's all tax free.
Actually, I'm encouraging all of my kids to start Roth
IRAs, since you never know what the tax rate will be in the
future, and this seems to be a great deal. Since you can
only put in 3K/yr, it's best to start out real early with
Roths.
Jonas