Features
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Contributions can be withdrawn at any age without taxes or penalties.
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Earnings you withdraw are tax-free after age 59½ if the account has been established for a minimum of five years.
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Contributions can be made at any age if you have earned income.
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No required minimum distributions during your lifetime
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Beneficiaries may pay no income tax on proceeds.
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A wide range of investment options is available.
Considerations
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Contributions are made with after-tax dollars and are not tax-deductible.
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Premature withdrawals in excess of contributions are fully taxable and subject to an early withdrawal penalty.
Tax Considerations*
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Contributions can only be made with after-tax dollars.
Type of Investments
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Stocks, bonds, mutual funds, exchange-traded funds (ETFs), U.S. Treasuries, Brokered CDs, unit investment trusts (UITs), and annuities
Eligibility
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Anyone who has earned income equal to or greater than their IRA contribution amount
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If you contribute to an employer-sponsored plan such as a 401(k), you are still eligible to contribute to a Roth IRA if you meet the Income Limits below.
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If you have no earned income but your spouse earns enough income to cover your contribution as well as his or her own, you can contribute to a Roth IRA.
Annual Contribution Limits
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$6,500 under age 50
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$1,000 additional catch-up contribution if age 50 and over
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You may contribute simultaneously to a Traditional IRA and a Roth IRA (subject to eligibility) if the total contributed to all (Traditional and Roth IRAs) does not exceed described limits.
Income Limits
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Your Modified Adjusted Gross Income (MAGI) cannot exceed:
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$153,000 for single filers
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$228,000 for joint filers
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Contributions are phased out for single filers with a MAGI between $138,000 and $153,000, and for joint filers with a MAGI between $218,000 and $228,000.1
