Do you wonder if saving for retirement is important? Is social security going to be there when I retire? Is my pension plan at work enough? Does your employer have a retirement plan for you? Whether you open a Traditional IRA or Roth IRA depends upon if you want to pay taxes now or later.
Key points about a Roth IRA are:
- Contributions are after tax dollars
- There is no age limit to make a contribution to a Roth IRA
- Qualified distributions are tax free
- Meet qualified distribution requirements, the earnings will be tax free.
- Eligibility is dependent upon income levels
- There is no required minimum distribution upon reaching age 70 1/2 like the Traditional IRA.
Qualified distributions from Roth IRAs may be tax and penalty free as long as they meet two requirements. First, the Roth IRA must satisfy a five year waiting period starting the first day of the year Roth IRA owner makes a regular contribution. Second, the distribution must be because of one of the following events:
- Age 59 ½
- Death
- Disability
- First-time homebuyer
Stop in today at one of our branch locations and open a Roth IRA. Start building your retirement nest egg and receive great benefits from opening a Roth IRA account here at HomeTown Bank.
