Roth IRA
A Roth IRA is funded with after-tax contributions and offers tax deferral on any earnings in the account. Withdrawals from the account may be tax free, as long as they are considered qualified. Unlike a traditional IRA, there are no income tax deductions allowed for Roth contributions.
Anyone can open a Roth IRA regardless of age. All a participant needs to be eligible is taxable compensation—salaries, wages, tips, bonuses, fees, etc. There are, of course, limits on contributions, and adjusted gross income must fall within IRS limits.
Any individual who meets theRoth income requirements can(1) establish a Roth IRA, and(2) make annual contributions up to $7,000 in 2024 ($8,000 if overage 50) using after-tax money. The annual contribution limits apply to an individual’s total IRA contributions for traditional and Roth IRAs. Roth IRA owners can withdraw contributions at any time without taxation or penalty, and can withdraw earnings tax free after age 59½ or after becoming disabled, assuming the Roth IRA has been in existence at least 5 years.
The retirement benefits of a Roth IRA are available to all individuals earning up to a maximum salary amount—the opportunity for tax-deferred growth, plus tax-free withdrawals after age 59½.
