The Roth IRA is the greatest financial account available to investors in the United States. The odds are good you qualify; as long as your annual income does not exceed $95,000 (single) or $150,000 (married), you can open a Roth IRA. Contributions (subject to annual
limits) are made with after-tax dollars. All
Roth IRA contributions can be withdrawn at any time without any
penalty. Once you reach the age of 59 1/2 (subject to the
five year rule), all withdrawals are absolutely, 100%
tax-free! In other words, if you purchased $10,000 worth of the next-Microsoft through your Roth IRA and held it for twenty years, selling the stake at retirement for $5 million, you would owe Uncle Sam nothing.
Additional benefits of a Roth IRA
- No mandatory distribution age
- Roth IRA contributions can be used to purchase a variety of investments (stocks, bonds, certificates of deposits, etc.)
- If you’ve been unemployed for longer than twelve weeks, you can use Roth IRA funds to pay medical insurance premiums without penalty
- Certain higher education costs for you, your spouse, and your immediate family can be funded through your Roth IRA
- Medical expenses in excess of 7.5% of your gross adjusted income can be paid for, without penalty, by your Roth IRA
You can open a Roth IRA at any brokerage firm. For a list of contribution limits, additional benefits, etc., you can visit the Roth IRA category.
