One major benefit of an IRA is that growth is not federally taxed until funds are actually withdrawn. This process is sometimes referred to as "tax deferral" and it allows for a more rapid build up of funds over the years.

All earnings and deductible contributions become subject to tax on withdrawal. The tax rate is based on the individual's ordinary income tax rate at the time of withdrawal. If your tax bracket is lower when you receive a distribution than when your IRA earned income, you benefit from tax savings in addition to tax deferral on the earnings. Taxable distributions taken before you reach age 59? are subject to a 10% federal penalty tax.

There are three different tax treatments for distributions of earnings from Roth IRAs. The distribution is either: The income tax applies to all withdrawals of earnings made before the "Five-Year Holding Period" is satisfied even if the Roth IRA owner is over 59 1/2, disabled, dies or uses the distribution for a first home purchase.

Income from a Traditional IRA account is taxable as ordinary income, the tax rate depends on your tax bracket. The law requires IRA owners to start taking distributions from their account by age 70 1/2. Failure to withdraw the required amount will result in a penalty of up to 50% the required withdrawal. One solution is to convert the Traditional IRA into a Roth IRA (after paying taxes on income), which is not subject to mandatory withdrawals.

Yes. If the principal of your TIPS grows in a given year, that growth will be taxed as income in that year, even if your security hasn't matured and, therefore, you haven't received payment of the principal.

The heir can spread the withdrawal over his or her life, continuing the tax shelter for amounts not withdrawn.

The FairTax is a single-rate, federal retail sales tax collected only once, at the final point of purchase of new goods and services for personal consumption. Used items are not taxed. Business-to-business purchases for the production of goods and services are not taxed. A rebate makes the effective rate progressive.

Roth IRA earnings may be withdrawn tax-free if your Roth IRA has been established for at least five years and one of the following apply:

The Occupational Employment Statistics (OES) program, (http://www.bls.gov/oes/) produces employment and wage estimates for over 700 occupations. These are estimates of the number of people employed in certain occupations, and estimates of the wages paid to them. These estimates are available for the nation as a whole, for individual States, and for metropolitan areas; national occupational estimates for specific industries are also available.

An IRA is a tax-deferred retirement account which allows an individual to set aside a certain amount per year with earnings tax-deferred until withdrawals begin at age 59 ½ or later. Only those who do not participate in a pension plan at work or who do participate and meet certain income guidelines can make deductible contributions to an IRA. All others can make contributions to an IRA on a non-deductible basis.

No, Retirement Plan Contributions are tax deferred - you do not pay taxes at the time they are contributed or onany earnings. Your Contributions and associated earnings are taxed only as the money is withdrawn as income.