What is a Roth IRA?
Roth IRAs offer a unique benefit that may not be available in other retirement accounts and that is tax-free distributions.

To qualify for the tax-free treatment, the Roth IRA account has to be funded with after-tax dollars and held for a minimum of five years or until age of 59 ½, whichever come last.

Unlike traditional IRAs, owners of Roth IRAs are not subject to lifetime Required Minimum Distributions (RMDs), a distribution requirement starting at age 70 ½ and you may also contribute to your Roth IRA for as long as you live, provided you qualify and have earned income.

Good news
As of 2010, two very important rules go into effect. 1) Roth IRA conversions are no longer subject to income limits and 2) if you convert your Traditional IRA or workplace plan to a Roth IRA in the year 2010, you may be able spread the tax liability generated by the conversion out over a two-year period (2011 and 2012).

Here is an idea for you
If you have lost your job and need to, or want to, move your 401K money, put it into a Traditional IRA and next year when the new rules go into effect, convert your Traditional IRA into a Roth IRA and get all the additional benefits.

Note: Income limits for opening or funding a Roth IRA have not been affected by the 2010 changes.