Quantcast

Here are our most frequently asked questions about Roth IRAs

What is a Roth IRA?

A Roth Individual Retirement Account is an after-tax investment vehicle for retirement-focused investing. Contributions to a Roth IRA are made with after-tax money; the account owner does not get a tax deduction on them. Withdrawals from Roth IRAs are generally not taxed. Funds held in a Roth IRA can be invested in numerous types of securities funds, and more through various account providers.

What is a Roth IRA Conversion?

A Roth IRA conversion is a rollover from another account type (typically a 401(k) or Traditional IRA) into a Roth IRA account. In the past, many investors who earned above the annual income limits for Roth IRAs were restricted to other retirement products. Recently, Roth IRA restrictions were loosened, opening up the Roth IRA to higher-income investors who previously had exceeded income limitations.

Do I Qualify for a Roth IRA?

The majority of the public does qualify for a Roth IRA. The only requirements to open a Roth IRA is that contributions are “earned income” and that the investor’s annual income falls below a designated threshold. Learn more on our Roth IRA Eligibility page.

How Much Can I Contribute Annually to a Roth IRA?

Individuals under the age of 50 may contribute up to $5,500 per year. If you are age 50 or over, you can contribute up to $6,500. These numbers are dependent on falling below qualifying income limits.

Can I Contribute to a Roth IRA in Addition to a Traditional IRA?

Yes, but the sum of all contributions cannot exceed the annual IRA contribution limits for your age and income level.

Are Roth IRA Withdrawals Always Tax-Free or Are There Any Limitations?

All “qualified” Roth IRA distributions are tax-free. A distribution is deemed “qualified” when money has been in the account for at least five years and the owner is at least 59½ years old, or has become disabled, dies, or is using up to $10,000 towards a first-time home purchase. In addition, you can withdraw your contributions only (not the money—earnings—those contributions have earned) at any time without paying taxes (that’s because you have already paid taxes on those contributions).

How Long Can I Make Contributions to My Roth IRA Account?

You can make contributions to your IRA as long as you are earning income. Roth IRA contributions must be “earned income.”

At Some Point Am I Required to Begin Taking Distributions?

No. This is a major difference from Traditional IRA Accounts, which begin forcing distributions at 70 and a half years old. Roth IRAs never force distributions.

Can I Transfer the Money in My Traditional IRA to a Roth IRA?

Yes. The government passed legislation making Roth IRA conversions open to more of the public starting in 2010. Read more by visiting our Roth IRA Conversion page.

Compare Popular IRA Providers

Provider
Fidelity Investments
Merrill Edge
E*Trade
NameFidelity Roth IRAMerrill Edge IRAE*Trade IRA
DescriptionGet a range of investment choices, tax advantages and 1:1 help with a Fidelity Roth IRA Learn MoreGet up to $600 when you invest in a new Merrill Edge IRA. Plus one-on-one guidance, actionable insights and easy-to-use tools. Learn MoreLearn more about an E*TRADE Roth IRA. > Learn More