What Is A Roth IRA And How Does It Work?
What is a Roth IRA?
A Roth IRA is a special IRA where you pay taxes on the dollars you invest for retirement but all future retirement withdrawal’s for retirement income are tax free.
Benefits to a Roth IRA are no required minimum distributions and tax free inheritance to anyone who inherits your Roth IRA. A Roth IRA has income limits and contribution limits.
The Roth IRA income limit doesn’t allow individuals or families to contribute to a Roth IRA. If their modified adjusted gross income is over a certain limit.
In the same way, Roth IRA contribution limits only allow those individuals who qualify to contribute a certain amount of retirement dollars on a yearly basis.
All contributions to a Roth IRA must follow a five-year rule before withdrawing any earnings from your Roth IRA.
Inside of a Roth IRA, are a variety of investment options. You can invest in mutual funds, stocks, bonds, ETFs, annuities, CDs, or money market funds. A Roth IRA can be opened at your local bank or at a custodian like Fidelity, Vanguard, or Charles Schwab.
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