Traditional or Roth IRA?

Discussion in 'Archived Threads 2001-2004' started by CapnSharpe, Dec 31, 2002.

  1. CapnSharpe

    CapnSharpe Stunt Coordinator

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    Always on the lookout for good financial advice, I found the following article on money.cnn.com http://money.cnn.com/2002/08/08/pf/c...oans/index.htm. I thought I found a good way to reduce my student loans early and to do with tax-free earnings - by opening a Roth IRA. The T. Rowe Price brochure says that the contribution and earnings from a Roth IRA WOULD be taxable if used for an educational purpose, but I wouldn't have to pay an additional 10% penalty.
    Is that correct? Or am I missing some fine print elsewhere in this brochure? I can't believe CNN would give such bad advice.
     
  2. Todd Hochard

    Todd Hochard Cinematographer

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    Withdrawing your original contributions to a Roth IRA is never taxable. After-tax money went in, and the same money can come back out at any time. The EARNINGS on that money are subject to all the normal IRA stuff if you withdraw early.
     

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