IRAs: Roth IRAs

Discover the unique benefits of Roth IRAs with our comprehensive guide. This resource covers eligibility criteria, contribution limits, and the tax advantages of Roth IRAs compared to traditional IRAs. Learn about the rules for contributions, qualified distributions, and the implications of income limits on contributions. Ideal for individuals planning for retirement, this guide helps maximize the tax-free growth potential of your investments.

Highlights:

• Contribution Limits: Up to $7,000 for individuals under 50 and $8,000 for those 50 and older in 2024, subject to income phaseouts.

• Tax-Free Growth: Contributions are made with after-tax dollars, allowing for tax-free withdrawals on qualified distributions.

• Income Phaseouts: Contribution limits are reduced or eliminated for higher-income earners, with specific thresholds based on filing status.

• No RMDs: Unlike traditional IRAs, Roth IRAs do not require minimum distributions during the owner’s lifetime.

• Qualified Distributions: Conditions for tax-free withdrawals include being over 59½, disabled, or using up to $10,000 for a first home purchase.