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In Reply to: IRA Basics posted by eric on March 19, 2004 at 11:04:11: "The contributions for a Roth IRA have already been taxed, and the growth is TAX-EXEMPT, not tax-deferred." Actually, growth is only tax-exempt if you withdraw it after age 59.5. It is presumed that any withdrawls come from the initial principal first, and then from the growth only after that. In the case of the withdrawl of any part of the growth in the account, you are, in fact, taxed on that amount, in addition to being penalized 10% for early withdrawl. So, its more accurate to say that until 59.5 its tax-deferred, and after 59.5, its tax-exempt. But, hey, its really not a big deal that a PFS person is correcting you. -Enrique
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