Here are the rules and regulations for working with Roth IRA accounts:
- Investors may contribute up to $3,000 annually. The amount
increases to $3,500 for investors 50 years old or older.
- Income limits to make the maximum contribution:
- Married filing jointly -- adjusted gross income at or below
$150,000;
- Single filers -- adjusted gross income at or below
$95,000.
- There are two ways to open a Roth IRA:
- cash contributions;
- convert a traditional IRA to a Roth.
- Earnings grow tax-free.
- Contributions are not tax-deductible.
- Distributions are tax-free provided they are made after age
59?and the account has been open for five years.
- Tax and penalty-free withdrawals may be taken before age
59?for the following reasons:
- First-time purchase of a home (up to $10,000);
- Disability as defined by Internal Revenue Code;
- Death of the IRA accountholder.
- State laws vary, check to see if your state protects Roth
IRAs if you declare bankruptcy.
- There is no required minimum distribution during account
owner's lifetime.