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. Withdrawals from Roth IRAs are not taxed. Funds held in a Roth IRA can be invested in numerous different 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 401k or Traditional IRA) into a Roth IRA account. In the past, many investors that 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 that previously 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 over 50, 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 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 59 and a half years old, or has become disabled, dies, or is using up to $10,000 towards a first time home purchase.

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.

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