Roth IRA

Can I Contribute to a Roth IRA?
You are eligible to contribute to a Roth IRA if you earn compensation or file a joint tax return with a spouse who earns compensation, and your modified adjusted gross income (MAGI) is less than or within the defined limits.

What is MAGI?
MAGI is your adjusted gross income before a Traditional IRA deduction are made.  MAGI limits are subject to annual cost-of-living adjustments.

How much can I contribute?
Depending on your MAGI, you may be able to contribute up to $6,000 for 2019 and for 2020, or $7,000 if you are age 50 and older.  Regular contributions to both Traditional and Roth IRAs in aggregate cannot exceed these limits, and contributions cannot exceed your annual compensation.

MAGI Limits
Year
Full Contribution Allowed
Partial Contribution Allowed
20019 Single
$122,000 or less
$122,000-$137,000
2020 Single
$124,000 or less
$124,000-$139,000 or less
2019 Married, filing jointly
$193,000 or less
$193,000-$203,000
2020 Married, filing jointly
$196,000 or less
$196,000 – $206,000

If you are single filing in 2019: No contribution allowed $137,000 or more
If you are single filing in 2020: No contribution allowed $139,000 or more
If you are married, filing jointly in 2019: No contribution allowed $203,000 or more
If you are married, filing jointly in 2020: No contribution allowed $206,000 or more

Can I take an income tax deduction for my contribution?
Roth IRA contributions are not tax-deductible.

When can I withdraw the money?
You may withdraw money from either type of IRA at anytime, subject to federal income tax.  If you are under age 59 1/2, you will also be subject to a 10% early distribution penalty tax on any taxable amount taken, unless you qualify for a penalty exception: death, (beneficiary distributions), disability, certain health insurance costs, certain medical expenses, higher education expenses, first-time home buyer expenses, birth of a child or adoption expenses, substantially equal periodic payments, IRS tax levy, qualified military reservist distributions, or qualified disaster-related distributions.

Will I ever be required to withdraw the money?
No.  Roth IRA owners are never required to take distributions.  After your death, however, your beneficiaries will be subject to required distributions (unless a spouse beneficiary treats the IRA as her own).

 

*IMPORTANT NOTE- The information contained in this brochure is not intended to provide specific advice or recommendations for any individual. We recommend that you consult your attorney, tax or financial advisor with regard to your personal situation.