A Roth IRA is a retirement account where you can make contributions with after-tax dollars. Owners of Roth IRAs are allowed to make annual contributions up to $5,500, or $6,500 if they are 50 years or older. Any contributions and profits may be withdrawn tax-free and penalty-free for qualified distributions.
To be considered a qualified distribution from a Roth IRA, you must meet two requirements. First, the account must be established and funded for at least five years before a qualified distribution can occur. Second, any one of the following must be true:
The owner is at least 59.5 years old
The distribution is being used to purchase the owner's first home and doesn’t exceed $10,000
The owner is or has become disabled at the time of the distribution
- The owner has passed away, and distributions are made to the beneficiary of the account holder.
Please visit the IRS website for more information about contribution limits and qualified distributions.
Are you looking for a Traditional IRA instead? Click here.