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Guide to Roth IRA Eligibility and Benefits

 

Eligibility

  • Have earned income
  • Single with an AGI below $118,000 - contributions phased out at an AGI of $133,000
  • Married filing jointly with an AGI below $186,000 - contributions phased out at an AGI of $196,000
  • View IRA Plan Limits

 

Contribution Limits/Deadline

  • Contributions are not deductible
  • $5,500 for 2018
  • $5,500 for 2017
  • Catch-Up Contributions for Individuals Age 50 or Older
    • $1,000 for 2018 and 2017
  • April 15 deadline for contributions for prior year

 

Distribution Regulations

  • Minimum distributions at age 70 1/2 are not required
  • Contributions may be withdrawn tax-free at any time
  • Qualified distributions are totally tax-free after five years and:
    • Age 59 1/2 attainment
    • Death or disability
    • First time home purchase ($10,000 maximum)

 

Who May Invest

  • Persons ineligible for a deductible Traditional IRA
  • Persons over age 70 1/2
  • Persons expecting to be in a higher tax bracket after retirement
  • Any persons with earned income
  • Non-employed spouses if filing a joint return

 

Benefits

  • Qualified withdrawals are totally tax-free
  • Contributions may continue past age 70 1/2 if investor has earned income
  • No required minimum distributions during lifetime
  • Beneficiaries can "stretch" the required minimum distributions

 

Effective 1/1/10 anyone can convert a Traditional IRA to a Roth IRA. See flyer for details.

 

The information contained herein should not be construed as tax planning advice. Please consult a qualified tax advisor for such advice. Withdrawals and other distributions of taxable amounts will be subject to ordinary income tax, and if taken prior to age 59 1/2, a 10% federal tax penalty may apply. A withdrawal charge may also apply.

 

Services and securities are offered through Security Distributors, a subsidiary of Security Benefit Corporation ("Security Benefit").

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