Guidelines for Roth IRA accounts
By Bankrate.com

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 59½ and the account has been open for five years.
• Tax and penalty-free withdrawals may be taken before age 59½ 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.

-- Updated: March 27, 2002