ROTH IRAs
The Roth IRA – Insured to $250,000
As long as you have earned income, you can establish and contribute to a Roth IRA even after 70½. While contributions are not tax deductible, contributions and earnings can be withdrawn tax free with limitations.
The contribution limits are the same as Traditional IRAs. After a five year period, there are no penalties for withdrawals if: you are over 59½; death/disability occurs; you have qualified medical expenses; you have certain health insurance; you have qualified college expenses; you are a 1st time homebuyer (up to $10,000); you have an IRS levy or you are making periodic payments.
Unlike Traditional IRAs, you are not required to begin taking required minimum distributions after you turn 70½. By converting your Traditional IRA to a Roth IRA, you can enjoy tax–free withdrawals. However, the amount you convert is subject to income tax now.
Catch Up Contributions: Individuals who have reached age 50 by the end of the year will be able to make up additional catch–up contributions of $1,000 per year to their Roth IRA.
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