Roth IRA

Tax-free growth potential

Roth IRAs may be a good choice, if you are seeking tax-free withdrawals in retirement, want to avoid required minimum distributions beginning at age 72, or feel you will be in the same or a higher tax bracket in retirement. Roth IRAs may be deposited in any CD term of 5 years or less. See rates here.

Benefits of a Roth IRA:

  • Flexibility: Roth IRAs allow for tax-free distributions (including interest earnings) after a 5-year holding period and one of the following events occurs:
    • Attainment of age 59½
    • The Roth IRA owner's death
    • Disability of the Roth IRA owner
    • Qualified first-time home buyer distributions
  • No mandatory withdrawals: There are no required minimum distributions that must begin at age 72, as is the case with Traditional IRAs
  • Saving during retirement: You can make contributions to a Roth if you continue to work in retirement, as long as you stay within the income limits. 
  • No age limits: There are no age limits for contributions as long as the eligibility requirements are met

Are you eligible?

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

Participant

2019

Single Individual:

Less than $122,000 – full contribution

$122,000 - $137,000 – partial contribution

More than $137,000 – no contribution

Married Individual filing joint income tax return:

Less than $193,000 – full contribution

$193,000 - $203,000 – partial contribution

More than $203,000 – no contribution

Married Individual filing a separate income tax return:

Less than $10,000 – partial contribution

More than $10,000 – no contribution

 

Participant

2020

Single Individual:

Less than $124,000 – full contribution

$124,000 - $139,000 – partial contribution

More than $139,000 – no contribution

Married Individual filing joint income tax return:

Less than $196,000 – full contribution

$196,000 - $206,000 – partial contribution

More than $206,000 – no contribution

Married Individual filing a separate income tax return:

Less than $10,000 – partial contribution

More than $10,000 – no contribution

 


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

Tax Year

Contribution Limit

Catch-Up Limit If Age 50 Or Older

Total Contribution Limit If Age 50 Or Older

2019

$6,000

$1,000

$7,000

2020

$6,000

$1,000

$7,000

Read Important Information About Earnings and Penalties.

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