March 23, 2021

Benefits of a Roth IRA

This time last year the CARES Act prompted many investors to consider a Roth IRA conversion. Everyone’s circumstances are different but it may be worth exploring the benefits of a Roth IRA. Of course, you should also consult a tax professional before making any decisions.


Roth contributions are funded with after-tax dollars, meaning there’s no deduction at the time of your deposit. However, when the money is withdrawn from the account no income tax is due, even if your tax rate has increased.


Unlike traditional IRAs, there is no RMD requirement during the account holder’s lifetime. This allows you to leave funds untouched and let the account grow tax-free for heirs. However, beneficiaries must take RMDs.


Roth IRA holders will never pay taxes on any investment returns in the account as long as they follow the withdrawal rules. This applies to beneficiaries as well.


Qualified withdrawals are tax and penalty-free. The rules vary depending upon age and how long the account has been held. However, you should adhere to the following guidelines:

  • Withdrawals must be taken after age 59 1/2
  • Withdrawals must be taken after a five-year holding period
  • There are exceptions to the early-withdrawal penalty such as a first-time home purchase, college expenses, and birth or adoption expenses


Since contributions are made with after-tax dollars, Roth IRA withdrawals will not affect your current or future tax rate. This can also remove any uncertainties or concerns about your future tax rate.

For more information, read our article about contributing to an IRA and Contact a Churchill Management Group advisor at (877) 937-7110 or to help you take the next steps in developing a retirement plan.

Written by Scott Perkins, MBA, CFP® Director of Financial Planning

*Disclosure Regarding Financial Planning Services. Churchill provides financial planning services to clients that specifically engage Churchill for that service. The planning can include defining goals, designing a plan, assisting with implementing the plan, and evaluating and adjusting the plan over time, at the request of the client. The financial planning includes advice regarding securities investing and may include discussions of a client’s tax, insurance, employee benefits, estate planning, and other issues. Churchill, however, does not provide legal, insurance, employee benefit, estate planning, tax or accounting advice, and the client must rely on legal, insurance and accounting professionals for that advice and documentation. No guarantee can be made as to increasing returns to an investment portfolio as a result of financial planning.

This email and any files transmitted with it are confidential and intended solely for the use of the individual or entity to whom they are addressed. If you have received this email in error please notify the system manager. Please note that any views or opinions presented in this email are solely those of the author and do not necessarily represent those of the Company. Finally, the recipient should check this email and any attachments for the presence of viruses. The Company accepts no liability for any damage caused by any virus transmitted by this email.

We reserve the right to monitor and review the content of all e-mail communications sent and/or received by its employees.

NO TRADING INSTRUCTIONS GIVEN ELECTRONICALLY – Please do not transmit orders and/or instructions regarding your account(s) by e-mail or any other electronic means. Orders and/or instructions transmitted electronically or left on a voice mail will not be accepted by Churchill Management Group and Churchill Management Group will not be responsible for carrying out such orders and/or instructions.

To review our privacy policy and your rights please click here.

To review our Terms of Use, please click here.