Fortunately, there's still a way to still a way to contribute to a Roth IRA
for those subject to the phase out of direct contributions by the income limits.
In October 2017, with final numbers on his 2016 return available, John might have recharacterized the precise amount back to his traditional IRA, keeping enough in the Roth IRA
to fill out a tax bracket but avoid having any dollars taxed at a higher rate.
There are no age limits for contributions to a Roth IRA
. However, income limits apply.
You can generally also roll over ("convert") non-Roth distributions from an employer plan into a Roth IRA
(you'll generally pay tax upon the "conversion" but qualified distributions from the Roth IRA
will be tax free).
Facts: In 2001James Benenson III and Clement Benenson each established a Roth IRA
. Shortly thereafter, each Roth IRA
invested $1,500 in JC Export, a newly formed domestic international sales corporation (DISC).
The program operated as a starter for a Roth IRA
account for those individuals who did not have retirement plans at work.
Maxing out your Roth IRA
? Less exhilarating, but much more rewarding.
It's not like this is a traditional versus Roth IRA
investors tend to be younger, which ICI attributes to the fact that only recently have the rules regarding Roth IRA
contribution limits, conversions and rollovers been eased.
That move: opening a Roth IRA
when a son or daughter is very young and contributing a few hundred dollars to it every month.
Before answering that question, which is the heart of this article, the following is a quick explanation of the Roth IRA
. The Roth IRA
is simply a personal retirement savings account where the owner prepays the tax.
The reports -- "The IRA Investor Profile: Traditional IRA Investors' Activity, 2007--2014" and "The IRA Investor Profile: Roth IRA
Investors' Activity, 2007--2014," which both use data from ICI's IRA Investor Database -- also found that withdrawal activity is lower, equity holdings are higher, and investors tend to be younger in Roth IRAs
than in traditional IRAs.