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Roth Individual Retirement Account

Invest Today For A Better Tomorrow.Woman planning out her Roth Individual Retirement Account from Columbia Bank

While traditional IRAs allow up-front tax reduction, any qualified distributions from Roth IRAs are tax-free. This can mean year after year of compound growth for your money.  Before you decide on a Roth IRA, consider your current tax bracket, as well as your projected tax bracket at the time of retirement. 

Roth IRAs have several important advantages over Traditional IRAs:

1. Unlike a traditional IRA, a Roth IRA distribution is tax-free
if you’ve had the account open at least five years, and reached the age of 59½, become disabled or died.
2. You can make contributions to your Roth IRA after age 70½, depending on whether you fall within the earned income limits.
3. Roth IRAs are not subject to the traditional IRA rules for required minimum distributions at age 70½.

Elements Of A Roth IRA Include:

  • The ability to make non-deductible contributions of up to $6,000 for tax year 2019 ($7,000 for individuals age 50 and older).
  • You can continue to make Roth IRA contributions even after age 70½, provided you have earned income. 
  • Qualified distributions are tax-free and IRS penalty-free for qualifying first-time homebuyers and individuals over age 59½.  
  • You are not required to take distributions from your Roth IRA during your lifetime.  
  • After the death of the IRA holder, specific death distribution rules apply.
  • Funds from a Traditional IRA can be converted or rolled over to a Roth IRA without paying IRS 10% penalty.  The amount withdrawn from the Traditional IRA for conversion or rollover to Roth IRA is treated taxable income.
  • A distribution is qualified if it is paid after five years from your first Roth IRA contribution or conversion.
  • And it is paid:
    • After attaining age 591/2
    • Due to disability
    • Due to death
    • First home purchase

Contact Columbia Bank to discuss the benefits of setting up a Roth IRA with one of our representatives. We'll help you grow your nest egg while you plan for a financially successful future.

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