PORTSMOUTH, Va. (WAVY) - Roth IRA is a unique method of saving for retirement. Stephanie Bard, Registered Associate with BayPort Financial stopped by to tell us more about why you may want to consider it in your financial planning.
The Roth IRA
- Must be earned income
- Single income must be less than $110,000/phase out $110k-$125k
- Married joint income must be less than $173,000/phase out $173k-$183k
- Non-working spouse can contribute as long as joint income tax return is filed
- No age limit
- Maximum $5000 per year/per month $416
- Over 50: $6000/per month $500
- Cannot be deducted from taxable income
- Deadline for 2012 contributions is 4/15/13
- Contributions can be withdrawn tax-free at any time
- Earnings charged 10% IRS penalty/taxes
- Earnings can be withdrawn penalty-free & tax-free after 5 years and age 59.5, disability, first time home purchase, or death (beneficiaries have other rules)
- Five year rule begins January 1 of contribution year-for example if contribution for tax year 2012 is made 1/15/2013, 5 year date starts at 1/1/12.
- No required minimum distributions
To get started on your financial planning, stop by any of the 15 BayPort Credit Union locations across Hampton Roads.
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