Roth IRA
Roth IRA for married people and individuals
Roth IRA works great for an average earner who begins saving quite early in life. If a 22 year old begins contributing around $4000 a year which is lesser than current maximum contribution limit of $5000, then when she retires at age 60, she will have more than a million dollars to spend tax free to enjoy the Grey years of her life.
However, Roth IRA works great for individual filers and married couples who file joint tax returns. Single filers who are married are locked out due to the restrictions on the limit. The government has specifically designed Roth IRA for the average earner; however, if a single tax filer who is married has a well earning spouse, then the government is not interested in giving one the benefits of Roth IRA.
There is an exception to this situation where if the couple has lived apart for at least a year, the individual who is a single filer can be eligible for Roth IRA. If one’s status is single, then you can contribute $5000 and $6000 for ages below 50 & 50 and above respectively.
In case an individual has more than one account his total contribution to all of them must not exceed $5000 annually or $6000 annually if aged 50 and above. And, irrespective of whichever retirement account the contribution is made, it must not exceed the reported income from earned salary for the tax year in consideration.
It is easy to make contributions in Roth IRA and do the Math since the contributions are post tax and taxes automatically get deducted upon deposit. So, by the time the individual withdraws the money at age 59 and half, as taxes are already deducted there is no need to pay more taxes. This attracts people the most in Roth IRA.
However, Roth IRA works great for individual filers and married couples who file joint tax returns. Single filers who are married are locked out due to the restrictions on the limit. The government has specifically designed Roth IRA for the average earner; however, if a single tax filer who is married has a well earning spouse, then the government is not interested in giving one the benefits of Roth IRA.
There is an exception to this situation where if the couple has lived apart for at least a year, the individual who is a single filer can be eligible for Roth IRA. If one’s status is single, then you can contribute $5000 and $6000 for ages below 50 & 50 and above respectively.
In case an individual has more than one account his total contribution to all of them must not exceed $5000 annually or $6000 annually if aged 50 and above. And, irrespective of whichever retirement account the contribution is made, it must not exceed the reported income from earned salary for the tax year in consideration.
It is easy to make contributions in Roth IRA and do the Math since the contributions are post tax and taxes automatically get deducted upon deposit. So, by the time the individual withdraws the money at age 59 and half, as taxes are already deducted there is no need to pay more taxes. This attracts people the most in Roth IRA.
