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If inertia has prevented you from making a decision about the Roth IRA, try looking at the Roth one angle at a time. Find the approach that suits you best. Then follow through.
Roth as retirement plan
This is what it's all about, isn't it? I-R-A. Individual retirement account. The Roth plays this role well.
As with traditional IRAs, you need compensation from a job or self-employment to have a Roth, and you can contribute no more than $3,000 a year to the account. You can have either an old-style IRA or a Roth or both, but you still have a $3,000 annual ceiling (your spouse can also contribute $3,000).
You can have a Roth regardless of whether you have a retirement plan at work and regardless of your age. Your income level, however, can make you ineligible.
If your adjusted gross income -- basically, your income before taking deductions and exemptions -- is more than $95,000 on a single return or $150,000 on a joint return, your right to a Roth is gradually phased out. Once you reach $110,000 on a single or $160,000 on a joint return, forget the Roth.
The downside of a Roth account is that you can't deduct contributions to it. But your reward for forgoing the write-offs far outweighs the cost. Once you're 59½ years old and the account has been open at least five years, you can withdraw as much as you want tax-and penalty-free.
Roth as Conversion
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