What is a Roth IRA Account?Roth IRA is a retirement savings account that may be established by any domestic individual who pays income tax and has a modified adjusted gross income that is below a certain amount established by the IRS.
Contributions to the Roth IRA account are taxed, and withdrawals are tax-free if they are considered a qualified distribution.
A withdrawal is considered a qualified distribution if the Roth IRA has been in existence for 5 years, and one of the following has occurred: 1. The account owner turns 59 1/2 years old. 2. The withdrawal of up to $10,000 is used for the first-time purchase of a home. 3. The account owner is disabled. 4. The account owner is deceased.
Annual deposits of up to $5,500 may be contributed to the IRA. Individuals over the age of 50 are allowed to contribute an additional $1,000 annually.
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