▁in ▁the ▁year ▁of ▁the ▁contribution . ▁It ▁is ▁not ▁tax ed ▁on ▁the ▁g ains ▁of ▁said ▁contributions ▁while ▁inside ▁the ▁account . ▁ ▁Because ▁tax es ▁( and ▁maybe ▁pen alt ies ) ▁must ▁be ▁paid ▁before ▁c ash ▁in ▁the ▁account ▁can ▁be ▁with dra wn ▁and ▁used , ▁this ▁account ▁is ▁hard ▁to ▁use ▁for ▁emer gen cies . ▁ ▁The ▁size ▁of ▁an ▁I RA ▁account ▁may ▁mis le ad ▁people ▁into ▁bel ieving ▁their ▁wealth ▁is ▁larger ▁than ▁it ▁actually ▁is . ▁The ▁tax ▁benefit ▁from ▁contributions ▁is ▁essentially ▁a ▁loan ▁that ▁must ▁be ▁paid ▁back ▁on ▁withdraw al . ▁Net ▁wealth ▁calculations ▁must ▁subtract ▁an ▁estimate ▁of ▁that ▁tax . ▁This ▁effect ▁means ▁that ▁$ xx ▁saved ▁in ▁a ▁traditional ▁I RA ▁is ▁not ▁equal ▁to ▁$ xx ▁saved ▁in ▁a ▁Roth ▁I RA . ▁Cont ribution s ▁to ▁a ▁traditional ▁I RA ▁are ▁from ▁pre - tax ▁income ▁and ▁contributions ▁to ▁a ▁Roth ▁are ▁from ▁after - tax ▁income . ▁ ▁With draw als ▁must ▁begin ▁by ▁age ▁ 7 0 ½ ▁( more ▁precisely , ▁by ▁April ▁ 1 ▁of ▁the ▁calendar ▁year ▁after ▁age ▁ 7 0 ½ ▁is ▁reached ) ▁according ▁to ▁a ▁formula . ▁If ▁an ▁invest or ▁fails ▁to ▁make ▁the ▁required ▁withdraw al , ▁half ▁of ▁the ▁mand atory ▁amount ▁will ▁be ▁conf isc ated ▁automatically ▁by ▁the ▁I RS . ▁The ▁Roth ▁is ▁completely ▁free ▁of ▁these ▁mand ates . ▁This ▁creates ▁tax able ▁income . ▁Any ▁withdraw