Chris Wertenberger

What's your idea of financial security?

 
 
Chris Wertenberger
509-834-2121
Union Gap, WA
 
Friday, December 19, 2014

The Facts About Roth IRAs

Did you know…1

  • IRAs represent more than one-quarter of total retirement assets in the U.S.
  • 18.6 million households had a Roth IRA at the end of 2011
  • 31 percent of U.S. households have both an IRA and employer-sponsored retirement plan

Planning for your future retirement plays a crucial role in your overall future financial security. A Roth IRA can help by providing a significant source of retirement income.

Is a Roth right for you?

  • If you have a long time horizon, you may find that a Roth IRA is a great way to help you build for your future retirement.
  • It might also be a good choice if you think you’ll be in a higher tax bracket when you retire, and you don’t need an immediate tax deduction.
  • If you don’t need the tax deduction and you qualify for both a Roth IRA and a tax-deductible Traditional IRA, consider the Roth IRA because:
    • You won’t have to take required minimum distributions when you reach age 70 ½. That makes a Roth IRA a useful estate planning tool – especially since the qualified distributions are federal income tax-free.
    • You’ll be able to withdraw your contributions at any time without penalty or taxes.

Are you eligible for a Roth IRA?

  • You can contribute to a Roth IRA if your Modified Adjusted Gross Income (MAGI)  is as follows for the 2013 tax year:

 

Full Contribution

Partial Contribution

Single Filer

MAGI below $112,000

MAGI $112,000 - $127,000

Married, filing jointly

MAGI below $178,000

MAGI $178,000 - $183,000

Contributions

  • There are limits on how much you can contribute to your IRA each year. Those limits are raised periodically.
  • These are special “catch-up” provisions that allow individuals age 50 and older to contribute extra money.

2013 Contribution Limits

Under age 50

$5,500

Age 50 and older

$6,500

  • You don’t have to contribute the maximum amount to an IRA.
  • The deadline for making a contribution to an IRA for the year is the due date of your tax return, not including filing extensions. However, to maximize the time for potential growth of your IRA contribution, it makes sense to contribute at the beginning of the year.

Taxes

  • You pay taxes up front on your contributions. You’ll pay no tax when you withdraw the money.
  • Under current regulations, you’ll pay no federal income taxes on the money earned on your contributions when you withdraw them if:
    • Your initial contribution to the Roth is held at least five years and
    • You are at least age 59 ½ or
    • You die, become disabled, or purchase a first home ($10,000 lifetime limit)

Conversions to a Roth IRA

You may also be eligible to convert your Traditional IRA to a Roth IRA. Or, if you have money from a workplace retirement plan that you need to move, you may be able to roll it into a Roth IRA. 

I can help explain your options so you can determine the best solution for your situation.

Count on COUNTRY

No matter where you’re starting from, an IRA from COUNTRY can help you build for your family’s financial future.

Backed by a team of experts, I am here to help you every step of the way.

Contact me today to get both the personal service and the comprehensive professional expertise you deserve.

Learn more

 

NOT FDIC-INSURED
May lose value
No bank guarantee

1Investment Company Institute. ICI Research Perspective. November 2011.
http://www.ici.org/pdf/per17-08.pdf 

Investment management, retirement, trust and planning services provided by COUNTRY Trust Bank®.

COUNTRY and our representatives cannot give tax advice. Any information we provide reflects our understanding of current tax laws. See your tax advisor for full details.