Roth IRAs

Another feature of the Roth IRA is that there are no required minimum distributions that must begin at age 70½, as is the case with Traditional IRAs. There are no age limits for contributions as long as the eligibility requirements are met.

Contribution Eligibility

In order to contribute to a Roth IRA, the contributor (or spouse if married and filing a joint return) must have earned income, equal or greater than, the contribution amount. If contributions are made to both a Roth and Traditional IRA, the maximum contribution to the Roth is reduced by the amount contributed to the Traditional IRA. Modified Adjusted Gross Income (MAGI) cannot exceed the following limits:

Roth IRA Contribution MAGI Ranges

• Single individual: $110,000-$125,000 for 2012 ($107,000-$122,000 for 2011)
  
• Married individual filing joint income tax return: $173,000-$183,000 for 2012 ($169,000-$179,000 for 2011)
  
• Married individual filing a separate income tax return: $0-$10,000 for both 2011 and 2012

Active participation status in an employer's retirement plan does not affect whether or not a contribution can be made to a Roth IRA. Both active participants and non-active participants are eligible for Roth IRA contributions as long as they meet the earned income and MAGI requirements. Active participant status only affects Traditional IRA deductibility.

Contribution amounts and catch-up contribution amounts will increase yearly as follows:

Click here to read important information about earnings and penalties.