Excerpt of Article at Newsday.com
The nice thing about a Roth IRA is that since you’ve already paid taxes on the money you’re putting in, you generally won’t have to pay taxes on money taken out.
The money has to be in the Roth for at least five years (and to get the full tax- free benefit you must be 59½ or older). That means if you invest anytime this year, you can begin withdrawing as much as you want starting in 2009.
By the way, if your original investment declines in value, you can liquidate your Roth IRA (no matter how new) and not pay a tax or penalty on the withdrawal, Dianne Besunder, a spokeswoman for the Internal Revenue Service in New York, said. (Note: This rule does not apply to Roth IRAs created through conversion from regular IRAs.)