Roth IRA

A Roth Individual Retirement Account (IRA) is a retirement account which lets you save and invest after-tax dollars. When you originally contribute funds in your Roth IRA, they have already been taxed. As time goes on, the investments grow tax free if certain requirements are satisfied and there are no additional taxes on regular contributions because you have already paid taxes on these funds.

In a Roth IRA, you can make investments to increase the value of your account and collect more money for your ideal retirement. The only limitations on the investments made in a Roth IRA are those restricted by the IRS, and include a very limited number of items.

Roth IRA contributions must be made with earned income, and that income must fall within certain Modified Adjusted Gross Income (MAGI) limits. View our COLA Limits document for the specific MAGI limits for Roth IRA accounts.

Key Features

• Tax-Free Growth
  Tax-free growth on all contributions placed into your account over time. All regular contributions made to a Roth IRA can be withdrawn at any time (tax-free) as these contributions are already taxed, if certain requirements are satisfied.

• No Distribution Requirements
  A Roth IRA does not require you take distributions based on age, unlike other tax-deferred retirement plans such as a Traditional IRA or a 401(k) plan.

• Tax-Free Withdrawals
  Roth IRA distributions, including the withdrawal of earnings, may be tax-free if certain requirements are met.

• First-Time Home Buyer
  Up to $10,000 can be withdrawn from a Roth IRA, penalty free, if the money is used to acquire a principal residence for a first-time home buyer. The owner must be the Roth IRA’s owner, their spouse, or their lineal ancestors and descendants. The individual cannot have owned a home in the previous 24 months.

NOTE: Please visit www.irs.gov for a complete breakdown of the rules and regulations concerning Roth IRAs. Certain restrictions apply regarding prohibited transactions.

Frequently Asked Questions

about Roth IRAs