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Retirement Savings: Consider a Roth IRA

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A Roth individual retirement account is a brilliant way to save for retirement. Much like a traditional IRA, a Roth IRA allows you to invest and for it to grow tax-free. One great advantage this type of account has is that it also lets you take tax-free withdrawals of your contributions at any age. Your earnings may have the same benefit under certain circumstances. For your earning to be withdrawn tax-free you must be:

  • 59 ½ years old
  • Disabled
  • Using the funds as first-time

 

Naturally, like any tax-advantaged retirement account, the IRS has stipulations and rules that cover contribution limits, income limits, and withdrawals.

 

Roth IRA Eligibility

The first requirement for contributing to a Roth IRA is having earned income. This could be from the income earned from working for someone else (commissions, tips, bonuses count). Secondly, this earned income could be from a self-operated business or other means of earned income such as tax alimony or even combat pay.

 

Earned income that does not count:

  • Rental properties
  • Nontaxable alimony
  • Child support
  • SS benefits
  • Unemployment benefits

 

On a plus side, there is no age limit for making Roth IRA contributions. From a teen working a summer job to someone even in their 80s can contribute. Note: someone under 18 would need to set up a custodial account.

 

If you are contributing towards another qualified retirement plan you are still eligible to contribute towards a Roth IRA. So, if you earn money and meet the limitations, you can contribute towards your own Roth IRA and your employer-sponsored 401(k) plan.


For more information on premium finance benefits and qualifications, listen to The Retirement Risk Podcast.

Company Retirement Risk Advisors
Category FREE CONTENT;ARTICLE / WHITEPAPER
Intended Audience CPA - small firm
CPA - medium firm
CPA - large firm
Published Date 06/20/2022

 

 


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Retirement Risk Advisors
(855) 491-0400
retirementriskadvisors.com

Retirement Risk Advisors is a retirement education company that is quickly becoming a top brand in the industry. Dave Hall, CPA started the company in 2019, with one course. Since that time, the company has continued to expand their offerings to include multiple courses, a podcast, weekly live events, and a risk-free retirement club. If you are looking for high quality, up-to-date, retirement education and planning you have come to the right place.