Planning Retirement with a Roth IRA
Many people rely on individual retirement accounts (IRAs) to help them put away investments for their eventual retirement. IRAs have different options, and among your choices you might find a Roth IRA. These plans can offer valuable tax and savings benefits to help you save for retirement
What’s a Roth IRA?
By carrying an IRA, you create an investment and savings cradle for retirement. The money within that account will grow over the years as you approach the end of your career. When you do stop working, you’ll have savings built up to support yourself later on.
Roth IRAs occupy a unique niche in the retirement account sphere. They offer a key perk not included in certain other plans. With a Roth, you contribute to the account after paying taxes on the income. Therefore, you won’t pay tax on these funds again while they’re in the account. You also can withdraw the money before retirement without a tax penalty in many cases.
How do you invest in the plan?
You’ll determine a portion of income to invest in the Roth account over the years. You’ll also be able to choose an investment portfolio of stocks, bonds and other options to help grow the money in the account. After you’ve set up the account, you can sit back and let the money grow. You also can often adjust the investments within the plan over time.
When can you withdraw the money?
Roth IRAs have a few rules on withdrawing the money tax-free. You have to be at least 59½ years old and have carried the plan for over five years to be able to withdraw unlimited funds. However, you can withdraw the money early at any time. Keep in mind, you might have to pay a penalty on money you withdraw early.
Who can get Roth plans?
Roth IRAs appeal to many people. However, like most retirement accounts, not everyone can qualify to enroll in a plan. Often, your income and earnings, along with your tax-filing status, determine your eligibility. Contact your local brokers, bank or Roth group to determine your eligibility.
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