Roth IRA Eligibility To Contribute

Roth IRA is a retirement plan that is not taxed upon withdrawal.  It is taxed before contribution.  This is great if you expect to be in a higher tax bracket upon retirement. It provides tax free growth of your money, however comes with some conditions and criteria.

Roth IRA differs from other retirement plans for one major reason, the tax break is granted on the money withdrawn from the plan during retirement rather than granting a tax break for money placed into the plan.

Roth IRA has requirements for one to be eligible for enrollment and membership:

• First, if you are a single tax filer your modified adjusted gross income needs to be less than $105,000 (to qualify for a full contribution) and $105,000-$120,000 (to be eligible for a partial contribution).
• Second, if you are married tax filers, your income should be less than $167,000 (to qualify for a full contribution) and $167,000-$177,000 (to be eligible for a partial contribution).
• Third, if you are married but filing separately (if the couple lived together for any part of the year) you need $0 (to qualify for a full contribution) and $0–$10,000 (to be eligible for a partial contribution).
• Fourth, the maximum annual contribution is $5,000 per person. Married individuals may contribute $10,000. Or individuals aging 50 and above, they can contribute $6,000 per person annually, this is due to a catch-up provision.
• Lastly, contributions can be withdrawn at any time and are not tax deductible because they are made in after tax dollars. This is beneficial if you expect to be in a higher tax bracket during retirement.

There are several different kinds of  accounts in the United States.  The Roth IRA retirement account has easy rules and requirements to get in.

If this sounds like something you are looking for, please read more on Roth IRA benefits and restrictions (which includes Roth IRA withdrawal rules and Roth IRA penalty).