In today’s tough economic world, it might be in your best interest to set up a Roth IRA with some of your money so you have protection after retirement. The major benefit of opening a Roth IRA is that it is protected by United States laws and is not taxed so long as the account meets certain requirements. If these requirements are not met by the account then the government can either tax the account or have it closed. If your account is ever closed it will need to be reopened with another number, hopefully using an accountant or financial planner who will steer you in the correct direction.
If you are below the age of 50, you can deposit $5,000 into your Roth IRA each year so long as you make $10,000 or more per year. The money deposited into your account can be done so without taxation but cannot be removed from the IRA before you hit the age of 60. If you have to remove the money from the account before you turn 60 years old then the money will be taxed by the government. You can remove the money from your Roth IRA after the age of 60 without the money being taxed or assessed fines by the government.
In order to protect the owner of the Roth IRA from losing his or her money upon death, the spouse can be named as the sole beneficiary of the account. Should the owner of the account pass away, it will be transferred to the spouse, who can combine the two accounts without facing any penalties from the government. Also, any assets in the Roth IRA can be passed down to heirs of the IRA owner upon their death should there be no living spouse at the time of death. The major disadvantage of contributing to a Roth IRA is that the contributions are not tax deductible. This means that the money you deposit into the account each year does not come with a refund from the government. Instead, you will be losing that money from your available pool of money until you reach the age of 60.