What is a Roth IRA?
The Roth IRA is a nondeductible account that features tax-free withdrawals for certain distributions reasons after a five year holding period.

Am I Eligible for a Roth IRA?
Basically there are two requirements for eligibility to contribute to a Roth IRA: you must have earned income (or your spouse must have earned income) and your modified adjusted gross income (MAGI) cannot exceed certain limits. Speak with one of our IRA specialist for specifics.

Do I pay taxes on My Earnings?
No, provided you take the earnings as part of a qualified distribution. That's the best part of the Roth IRA. Unlike a traditional IRA, you cannot take a tax deduction for any of the contributions that you make to a Roth IRA. However, when you're ready to take a withdrawal, you pay no taxes on any of the earnings that your money has generated.

What is a qualified distribution?
In order for earnings to be tax free, you must first meet a five year holding period for your Roth IRA. This period begins with the tax year for which the first contribution is made. After that, any earnings you withdraw for a qualified distribution reason are tax free and IRS penalty free. Qualified distributions include:
 

• Distributions made on or after the date on which you attain age 59 ½
• Distributions made to your beneficiary (or your estate), upon your death
• Distributions attributable to your being disabled
• Qualified first time home buyer distributions, up to $10,000

Does the 10% IRS Premature Distribution Apply if I Withdraw My Money Before Age 59 ½?
The 10 percent IRS penalty does not apply to earnings you withdraw when you take any of the qualified distributions listed above. In addition, the 10 percent penalty is also waived for certain other distribution reasons. But for these distributions, taxes on any earnings will apply. Distributions that are subject to taxes (on any earnings withdrawn) but no penalty include:
 

• Substantially equal periodic payments
• Eligible medical expenses in excess of 7.5 percent of your adjusted gross income (AGI)
• Medical insurance premiums for eligible unemployed individuals
• Qualified education expenses
• Distributions taken within the first five years for any reasons: age 59 ½, death, disability, or first time home purchase

When Is the Contribution Deadline for Funding a Roth IRA?
Roth IRAs for the taxable year can be opened and funded any time between January 1 and the date your tax return is due for the year, excluding extensions. This due date is normally April 15^th of the following year.

How Do I Open a Roth IRA?
Simply see any of our IRA Representatives. We will explain the nature of these accounts in more detail and help you complete the simple forms necessary to establish your Roth IRA.

To reach an IRA Representative call 1-800-698-2265.