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Roth IRA Plans

A Roth Individual Retirement Account (Roth IRA)

A Roth Individual Retirement Account (Roth IRA)

A Roth IRA is a retirement savings account. It allows your money to grow tax-deferred and to withdraw it tax-free at retirement if you meet certain conditions. You contribute to a Roth IRA with after-tax dollars, meaning you’ve already paid taxes on the money you put into it. In return for no up-front tax break, your money grows tax-free. When you withdraw money from your account, it is tax-free!

What Types Of Investment Choices Are Available?

What Types Of Investment Choices Are Available?

Working with a financial advisor may help you choose investments that best meet your financial objectives, based on your personal investment objectives and risk tolerance. You should consider the investment objectives, risks, and charges and expenses of the funds offered carefully before investing.

When can I make withdrawals from a Roth IRA?

You may withdraw your Roth IRA contributions tax and penalty free for any reason. However, the distribution must be “qualified” and at least five calendar years must have passed from the first contribution in order to avoid being taxed or penalized on any investment earnings.

The qualifying distribution reasons are:

  • Attainment of age 59 ½
  • Death
  • Disability
  • First-time home purchase (with a $10,000 lifetime in aggregate to all IRAs)
  • Qualified higher education expenses
  • Medical expenses greater than 7.5% of your adjusted gross income
  • Medical insurance premiums during a period of unemployment
  • Qualified Reservist distribution
No Required Minimum Distributions

No Required Minimum Distributions

Roth IRAs have no RMD requirements.

With a traditional IRA, you must start making RMD withdrawals after you reach age 73. While you can no longer contribute to a traditional IRA after you have turned 73, you can continue to contribute to a Roth IRA regardless of your age.

2023 Contribution Limits

2023 Contribution Limits

The government limits Roth IRA contributions by income level. The income limit for contributing the maximum to a Roth IRA is $138,000 in 2023 for a single person. For married filing jointly it is $218,000 in 2023.

If you’re single, the amount you can contribute to a Roth IRA gets reduced once your modified gross income goes over $138,000. And once your modified adjusted gross income hits $153,000, you can no longer contribute to a Roth IRA.

For married couples filing jointly, the reduction in contributions starts at the $218,000 threshold, and contributions are prohibited beyond incomes of $228,000.

This table shows whether your contribution to a Roth IRA is affected by the amount of your modified AGI as computed for Roth IRA purpose.

ROTH 2023 Maximum Contribution Limits

If Your Filing Status Is…

And Your Modified AGI Is…

Then You Can Contribute…

single or
head of household
$138,000 or lessup to the limit.
single or
head of household
 > $138,000 but < $153,000a reduced amount.
single or
head of household
> $153,000zero.

married filing
jointly or qualifying widow(er)

< $218,000up to the limit.
married filing
jointly or qualifying widow(er)
> $219,000 but < $228,000a reduced amount.
married filing
jointly or qualifying widow(er)
>  $228,000 zero.
married filing separately> $10,000a reduced amount.
married filing separately> $10,000zero.


The Roth IRA is flexible. You can withdraw your contributions (but not the earnings) without incurring a penalty so you have more access to your money.

Sources: 

https://www.irs.gov/retirement-plans/amount-of-roth-ira-contributions-that-you-can-make-for-2023

https://www.irs.gov/retirement-plans/roth-iras

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