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Roth IRA is a type of individual retirement account where contributions are not tax deductible, but distributions (including earnings) can be tax free if certain circumstances exist. Clients who qualify can contribute beyond age 70½ and there are no required minimum distributions. In order to qualify for this type of IRA, some income restrictions may apply.
Eligibility Requirements
You may contribute at any age as long as you have earned compensation subject to income limits:
You may contribute at any age as long as you have earned compensation subject to income limits:
2023
- For single filers: Modified adjusted gross income (MAGI) up to $138,000 for full contribution; MAGI $138,000 - $153,000 for partial contribution; not eligible if MAGI $153,000+.
- For married/joint filers: MAGI up to $218,000 for full contribution; MAGI $218,000 -$228,000 for partial contribution; not eligible if MAGI $228,000+.
2024
- For single filers: Modified adjusted gross income (MAGI) up to $146,000 for full contribution; MAGI $146,000 - $161,000 for partial contribution; not eligible if MAGI $161,000+.
- For married/joint filers: MAGI up to $230,000 for full contribution; MAGI $230,000 -$240,000 for partial contribution; not eligible if MAGI $240,000+.
Key Tax Advantage
Tax-free growth1
Maximum Annual Contribution for 2023
Under age 50: $6,500 or 100% of compensation, whichever is less (in aggregate to both a Traditional and a Roth IRA). If Age 50 and Over: $7,500 or 100% of compensation whichever is less (or aggregate to both a Traditional and a Roth IRA).
Under age 50: $6,500 or 100% of compensation, whichever is less (in aggregate to both a Traditional and a Roth IRA). If Age 50 and Over: $7,500 or 100% of compensation whichever is less (or aggregate to both a Traditional and a Roth IRA).
Maximum Annual Contribution for 2024
Under age 50: $7,000 or 100% of compensation, whichever is less (in aggregate to both a Traditional and a Roth IRA). If Age 50 and Over: $8,000 or 100% of compensation whichever is less (or aggregate to both a Traditional and a Roth IRA).
Under age 50: $7,000 or 100% of compensation, whichever is less (in aggregate to both a Traditional and a Roth IRA). If Age 50 and Over: $8,000 or 100% of compensation whichever is less (or aggregate to both a Traditional and a Roth IRA).
Tax Deductible Contributions
No
No
10% Early Withdrawal Penalty
Yes, if you are under age 59 ½ and the withdrawal is not for qualified reasons. Plus, your Roth IRA must meet five-year aging requirements.
Mandatory Distributions
No requirements to begin distributions at any age during account owner's lifetime.
- Consult your tax advisor or see Publication 590 for more information.