The Benefits And Restrictions Of A Roth Individual Retirement Account
When planning for your retirement, it is important to consider what types of financial options are available.
Many adults dream about the day that they will be able to leave their present jobs, and never return.
Without the correct financial retirement plans in play, many adults dreams of kissing the working life goodbye, become just that, a dream.
There are many different types of retirement plans that you can choose to invest funds into while you are still working.
One popular type of retirement account is known as a Roth Individual Retirement Account or IRA for short.
These accounts allow individuals to set a specific amount of money aside from their income, after taxes have been removed.
These accounts are beneficial to the people that are able to qualify for them.
There is some basic criterion that an individual must meet before applying for an account.
Single individuals, will need to earn a gross income that does not exceed $105,000 annually.
Married couples will need to make under $167,000 annually, when their incomes are combined.
Maximum contribution levels exist as well.
The maximum amount of money that a single individual can add in one year is $5,000.
Married individuals are able to contribute up to $10,000 per year.
As long as you meet the basic criterion to be able to open one of these accounts, you will be able to yield the benefits of owning an Individual Retirement Account in the future.
Earnings that are added to the account are not subjected to income taxes, as long as the earnings are held for a period of five years.
Before funds can be withdrawn, the owner of the account must be at least 59 1/2 years old.
One attractive feature of owning one of these accounts is in the event that the owner of the account should pass on their assets will be given to their beneficiaries.
In a way, these Individual Retirement Accounts act as a secondary life insurance.
With all of the benefits of owning one of these accounts there are some disadvantages.
If your income levels exceed the maximum income levels that exist for a Roth IRA, you will not be able to open an account.
If any monies are withdrawn from the account before the owner of the account reaches the age of 59 1/2 they will be subjected to a ten percent early withdrawal fee.
Opening up an account is a great way to secure money for retirement, but there are restrictions that exist.
Many adults dream about the day that they will be able to leave their present jobs, and never return.
Without the correct financial retirement plans in play, many adults dreams of kissing the working life goodbye, become just that, a dream.
There are many different types of retirement plans that you can choose to invest funds into while you are still working.
One popular type of retirement account is known as a Roth Individual Retirement Account or IRA for short.
These accounts allow individuals to set a specific amount of money aside from their income, after taxes have been removed.
These accounts are beneficial to the people that are able to qualify for them.
There is some basic criterion that an individual must meet before applying for an account.
Single individuals, will need to earn a gross income that does not exceed $105,000 annually.
Married couples will need to make under $167,000 annually, when their incomes are combined.
Maximum contribution levels exist as well.
The maximum amount of money that a single individual can add in one year is $5,000.
Married individuals are able to contribute up to $10,000 per year.
As long as you meet the basic criterion to be able to open one of these accounts, you will be able to yield the benefits of owning an Individual Retirement Account in the future.
Earnings that are added to the account are not subjected to income taxes, as long as the earnings are held for a period of five years.
Before funds can be withdrawn, the owner of the account must be at least 59 1/2 years old.
One attractive feature of owning one of these accounts is in the event that the owner of the account should pass on their assets will be given to their beneficiaries.
In a way, these Individual Retirement Accounts act as a secondary life insurance.
With all of the benefits of owning one of these accounts there are some disadvantages.
If your income levels exceed the maximum income levels that exist for a Roth IRA, you will not be able to open an account.
If any monies are withdrawn from the account before the owner of the account reaches the age of 59 1/2 they will be subjected to a ten percent early withdrawal fee.
Opening up an account is a great way to secure money for retirement, but there are restrictions that exist.
