A Roth IRA is an individual retirement account that offers the opportunity for tax-free income in retirement. Annual contributions are taxed upfront and all earnings are federal tax-free when they are distributed according to IRS rules. This is much different than a Traditional IRA, which taxes withdrawals. Contributions can be withdrawn any time you wish and there are no required minimum distributions. If you are in a lower tax bracket today than you will be during retirement, a Roth IRA may be a smart choice.
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Eligibility | To contribute, you must earn income. There are no age limits. |
Income Limits | 2022 If you are single, $144,000 or less If you file jointly, $214,000 or less
2023 If you are single, $153,000 or less If you file jointly, $228,000 or less |
Contributions | Are not tax deductible |
Maximum Contributions | 2022 Up to age 50: $6,000 Age 50+: $7,000 Non-income-earning spouse: $6,000 (into a separate IRA) 2023 Up to age 50: $6,500 Age 50+: $7,500 Non-income-earning spouse: $6,500 (into a separate IRA) |
Earnings | Grow tax-free |
Distributions | Free from federal income tax when: – The Roth IRA account has been open for at least 5 years -You are age 59 1/2 or older |
Required Minimum Distributions | Are never required |
Early Withdrawals | Before age 59 1/2 are subject to a 10% penalty in addition to any ordinary income tax that may be due |
Carefully consider the investment objectives, risks, charges and expenses before investing. A prospectus, obtained by calling 800-669-3900, contains this and other important information about an investment company. Read carefully before investing.
Market volatility, volume and system availability may delay account access and trade executions.
Before rolling over a 401(k) to an IRA, be sure to consider your other choices, including keeping it in the former employer’s plan, rolling it into a 401(k) at a new employer, or cashing out the account value. Keeping in mind that taking a lump sum distribution can have adverse tax consequences. Be sure to consult with your tax advisor.
All investments involve risks, including the loss of principal invested. Past performance of a security does not guarantee future results or success.
Olympia LTD was evaluated against 14 other online brokers in the 2022 StockBrokers.com Online Broker Review. The firm was rated #1 in the categories “Platforms & Tools” (11 years in a row), “Desktop Trading Platform: thinkorswim®” (10 years in a row), “Active Trading” (2 years in a row), “Options Trading,” “Customer Service,” and “Phone Support.” Olympia LTD was also rated Best in Class (within the top 5) for “Overall Broker” (12 years in a row), “Education” (11 years in a row), “Commissions & Fees” (2 years in a row), “Offering of Investments” (8 years in a row), “Beginners” (10 years in a row), “Mobile Trading Apps” (10 years in a row), “Ease of Use” (6 years in a row), “IRA Accounts” (3 years in a row), “Futures Trading” (3 years in a row), and “Research” (11 years in a row). Read the full article.
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