Roth IRA
Roth IRA is a wonderful investment and retirement option. It can hold many assets and investments and the tax structure is quite easy to understand. The contribution made to the Roth IRA is post tax so the need to pay taxes upon withdrawal is completely eliminated. However, this condition is for contribution amount only and does not apply to the withdrawal of earnings and interest. If earnings are withdrawn prior to the age of 59 and half, they incur a penalty of ten percent with state and federal taxes.
But, all is not lost as in emergencies and certain exceptional situations, this rule is relaxed. Some of these situations are:
· For an individual who wants to purchase his first home, a lifetime withdrawal limit of $10,000 has been made. However, the owner must have had the Roth IRA for at least 5 years before making this move. In addition to that, first time home owner is a person who has not owned a home in at least 2 years.
· If an individual has consistently been on unemployment benefit for 12 weeks or more, then the amount can be withdrawn from Roth IRA to pay off his medical insurance premium.
· In case of permanent disability.
· To pay off unimbursed medical expenses.
Apart from that, there are a few other situations as well. For more information ask your financial consultant or refer to publication 590 of the IRS.
The best move is to consult a financial expert who has a wide experience in the field and would suggest plans and investment solutions to make your retirement years better and utilize the Roth IRA account’s benefits to the maximum possible advantage. Since, they are professionals, they would understand one’s financial needs better.
But, all is not lost as in emergencies and certain exceptional situations, this rule is relaxed. Some of these situations are:
· For an individual who wants to purchase his first home, a lifetime withdrawal limit of $10,000 has been made. However, the owner must have had the Roth IRA for at least 5 years before making this move. In addition to that, first time home owner is a person who has not owned a home in at least 2 years.
· If an individual has consistently been on unemployment benefit for 12 weeks or more, then the amount can be withdrawn from Roth IRA to pay off his medical insurance premium.
· In case of permanent disability.
· To pay off unimbursed medical expenses.
Apart from that, there are a few other situations as well. For more information ask your financial consultant or refer to publication 590 of the IRS.
The best move is to consult a financial expert who has a wide experience in the field and would suggest plans and investment solutions to make your retirement years better and utilize the Roth IRA account’s benefits to the maximum possible advantage. Since, they are professionals, they would understand one’s financial needs better.
