So, how do you decide whether a Roth IRA belongs in your retirement plan?
You don't get a tax write-off for contributions as you would with a traditional IRA. Nor can you set aside pre-tax income as you can with a 401(k). But Roth earnings can be withdrawn TAX FREE in retirement. Yes, tax-free income. Can't beat that.
And there's no mandatory withdrawals as with a traditional IRA, and money in a Roth can go to an heir tax free. And you don't have to relegate Roth savings just toward retirement. You can use the money to help buy a first home or pay college bills (of course, certain rules apply).
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Roth IRAs definitely have plenty of benefits. But not everyone can take advantage of one (income limits do apply). The stories below will help you figure out whether a Roth is right for you.
With this indispensable savings tool, your money grows tax-free, you can invest in almost anything and you get several cool perks. But open your account soon. You only have until April 17 to make contributions for 2006.
Earned Income Required for a Roth
You can open and fund this tax-advantaged retirement account at any age -- as long as you have earnings from a job.
Dealing With Excess Roth Contributions
You have a couple of options if you discovered you topped the income limit for contributing to a Roth after you already stashed money in your account.
Your child needs earned income to open an account but doesn't have to contribute his or her own money. Learn more about the rules.
Use a Roth to Save for College?
A Roth IRA can double as your retirement fund and your child's college fund, but there are better savings options available.
Roth IRAs Not Best for Emergency Savings
You can withdraw contributions without a penalty or tax bill, but there is a big downside.
-
Stock Market Today: Dow Adds 654 Points as 3M Stock Explodes HigherIt was a risk-on day for stocks thanks to an upbeat inflation reading and impressive earnings from 3M and Deckers.
-
3M Leads Dow Stocks After Massive Earnings Beat3M stock is headed toward its best day ever after the industrial conglomerate's impressive earnings report. Here's what you need to know.
-
Medicare Basics: 11 Things You Need to KnowMedicare There's Medicare Part A, Part B, Part D, Medigap plans, Medicare Advantage plans and so on. We sort out the confusion about signing up for Medicare — and much more.
-
Six of the Worst Assets to Inheritinheritance Leaving these assets to your loved ones may be more trouble than it’s worth. Here's how to avoid adding to their grief after you're gone.
-
403(b) Contribution Limits for 2024: Good News for Teachersretirement plans Teachers and nonprofit workers can contribute more to a 403(b) retirement plan in 2024 than they could in 2023.
-
SEP IRA Contribution Limits for 2024SEP IRA A good option for small business owners, SEP IRAs allow individual annual contributions of as much as $69,000 a year.
-
Roth IRA Contribution Limits for 2024Roth IRAs Roth IRA contribution limits have gone up for 2024. Here's what you need to know.
-
SIMPLE IRA Contribution Limits for 2024simple IRA The SIMPLE IRA contribution limit increased by $500 for 2024 and workers at small businesses can contribute up to $16,000 or $19,500 if 50 or over.
-
457 Contribution Limits for 2024retirement plans State and local government workers can contribute more to their 457 plans in 2024 than in 2023.
-
Roth 401(k) Contribution Limits for 2024retirement plans The Roth 401(k) contribution limit for 2024 is increasing, and workers who are 50 and older can save even more.
