Q: I know the basic tax benefits of Roth IRAs (tax-free withdrawals), but are there any other reasons to choose this account type over a traditional IRA?

You're right that the biggest difference between traditional and Roth IRAs is the tax implications. However, the Roth IRA has several other key benefits because of the after-tax nature of Roth contributions.

For one thing, you are free to withdraw your Roth IRA contributions (but not your investment profits) at any time, and for any reason. The way the IRS sees it, you've already paid tax on this portion of your account, so you can do with it as you please. This makes a Roth IRA a smart choice for investors who don't like the idea of having their money tied up until retirement age.

Roth IRAs also have no minimum distribution requirements as you get older. Traditional IRAs require the account owner to start taking required minimum distributions (RMDs) at age 70 1/2. Withdrawals from these accounts are taxable income, so the IRS won't simply let you grow your money tax-deferred forever. On the other hand, with a Roth IRA the IRS can't touch a penny of your qualified distributions, so the agency has no such rule with these accounts.

Finally, the Roth IRA has no maximum age to make contributions. You can no longer contribute to a traditional IRA after reaching age 70 1/2, but you can contribute to a Roth IRA for as long as you earn income. This makes a Roth a smart choice for older workers who want a tax-advantaged investment option for some of their earnings.

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