Roth IRA
Summarizing Roth IRA in a few simple words
Roth IRA is an excellent choice for the average worker irrespective of the fact whether he holds a traditional IRA, 401k or any other retirement or pension plans. Anyone can opt for a Roth IRA despite his age whether teenager, young adult or a senior citizen. The only condition to hold a Roth IRA is to have an earned income which facilities easy contribution to the account.
Apart from that Roth IRA depends on the maximum income limit of the account holder. In traditional IRA there are minimum income limits; however, there are no maximum income limits, so even the rich or affluent sections of the society make the best use of a traditional IRA.
But, Roth IRA works on the opposite principle since it has been designed specifically for the average earning middle class man, woman who dreams of having a secured retired life and owning a home someday. In Roth IRA there are no minimum income limits; however, there are maximum income limits. Individuals earning more than that do not qualify.
These income limits and contribution limits get revised each tax year depending on the Economy. From the previous year, the contribution and income limits have stayed almost the same. Persons aged below 50 have to contribute around $5000 annually while those who’re 50 and above can contribute up to $6000 so that they can catch up on lost time.
Since, only contributions can be withdrawn from Roth IRA prior to 59 and half without taxes, there are certain exceptional situations considered which can help certain Roth IRA holders facing the same. For instance, those who are buying their first home can withdraw up to $10,000 lifetime limit from their Roth IRA. Permanently Disabled Roth IRA holder or unemployed Roth IRA holder too has his fair share of accommodations in the Roth IRA.
Apart from that Roth IRA depends on the maximum income limit of the account holder. In traditional IRA there are minimum income limits; however, there are no maximum income limits, so even the rich or affluent sections of the society make the best use of a traditional IRA.
But, Roth IRA works on the opposite principle since it has been designed specifically for the average earning middle class man, woman who dreams of having a secured retired life and owning a home someday. In Roth IRA there are no minimum income limits; however, there are maximum income limits. Individuals earning more than that do not qualify.
These income limits and contribution limits get revised each tax year depending on the Economy. From the previous year, the contribution and income limits have stayed almost the same. Persons aged below 50 have to contribute around $5000 annually while those who’re 50 and above can contribute up to $6000 so that they can catch up on lost time.
Since, only contributions can be withdrawn from Roth IRA prior to 59 and half without taxes, there are certain exceptional situations considered which can help certain Roth IRA holders facing the same. For instance, those who are buying their first home can withdraw up to $10,000 lifetime limit from their Roth IRA. Permanently Disabled Roth IRA holder or unemployed Roth IRA holder too has his fair share of accommodations in the Roth IRA.
