Roth IRA
Description
The Roth IRA is an Individual Retirement Account that was created through the Taxpayer Relief Act of 1997 to provide an alternative for traditional nondeductible IRAs. The Roth IRA allows after-tax contributions with the potential for tax-free income in retirement.
Objective
To provide individuals with an account into which they may contribute dollars that may be used for retirement.
Suitability
The Roth IRA is suitable for individual investors, including minors and persons over the age of 70 1/2 with compensation and modified adjusted gross income (MAGI) under the applicable limits.
If you find that you are not currently eligible to contribute to a Roth IRA be aware of the opportunity to convert a Traditional IRA to a Roth IRA. Learn more about the IRA Conversion opportunity.
Product Features
- Contributions - Contributions are limited to $5,000 ($6,000 if age 50 or older) per year or 100% of earned income, whichever is less. An individual can make contributions to a Roth IRA, deductible IRA, and a nondeductible IRA, as long as the total annual contribution for all three accounts, per person, does not exceed $5,000 ($6,000 if age 50 or older) or 100 percent of earned income. Participation in any business retirement plan (SEP, SIMPLE, 401(k), Profit Sharing, 403(b), etc.) does not limit the contribution amount to the Roth IRA.
- Tax Advantages - Although the contributions are not deductible, the earnings grow tax deferred and potentially tax-free. Distributions can be removed penalty free and tax-free if certain guidelines are followed.
- Flexibility - Contributions can be invested to meet personal objectives. You can choose from a variety of investments including CDs, stocks, bonds and mutual funds. Mandatory distributions are not required from a Roth IRA at age 70 1/2.
For more information, please contact your local financial advisor.
