Roth Individual Retirement Account
Invest Today For A Better Tomorrow.While traditional IRAs allow up-front tax reduction, any qualified distributions from Roth IRAs are tax-free. This can mean year after year of compound growth for your money. Before you decide on a Roth IRA, consider your current tax bracket, as well as your projected tax bracket at the time of retirement.
Roth IRAs have several important advantages over Traditional IRAs:
1. Unlike a traditional IRA, a Roth IRA distribution is tax-free
if you’ve had the account open at least five years, and reached the age of 59½, become disabled or died.
2. You can make contributions to your Roth IRA after age 70½, depending on whether you fall within the earned income limits.
3. Roth IRAs are not subject to the traditional IRA rules for required minimum distributions at age 70½.
Elements Of A Roth IRA Include:
- The ability to make non-deductible contributions of up to $6,000 for tax year 2019 ($7,000 for individuals age 50 and older).
- You can continue to make Roth IRA contributions even after age 70½, provided you have earned income.
- Qualified distributions are tax-free and IRS penalty-free for qualifying first-time homebuyers and individuals over age 59½.
- You are not required to take distributions from your Roth IRA during your lifetime.
- After the death of the IRA holder, specific death distribution rules apply.
- Funds from a Traditional IRA can be converted or rolled over to a Roth IRA without paying IRS 10% penalty. The amount withdrawn from the Traditional IRA for conversion or rollover to Roth IRA is treated taxable income.
- A distribution is qualified if it is paid after five years from your first Roth IRA contribution or conversion.
- And it is paid:
- After attaining age 591/2
- Due to disability
- Due to death
- First home purchase