Guidelines for Roth IRA accounts
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
- Tax and penalty-free withdrawals may be taken
before age 59½ for the following reasons:
- First-time purchase of a home (up to
- Disability as defined by Internal Revenue
- 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