Individual Retirement AccountsRoth IRA

What is a Roth IRA?

• A Roth IRA is a type of Individual Retirement Plan that allows eligible individuals to invest up to $5,000 of earned income, tax-free. Unlike Traditional IRAs, you are not required at age 70 1/2 to take a minimum distribution and may continue to make contributions with earned income.
• If you are 50 years or older, you may contribute up to $6,000.
  

Who is eligible to contribute and how much?

• Any individual who has earned income.

Are my contributions tax-deductible?

• Contributions to Roth IRAs are not tax-deductible.

Can I convert my existing Traditional IRA into a Roth?

• You can convert all or a portion of your existing Traditional IRAs into a Roth IRA, howeveer, tax consequences may apply.^†
• If you are married filing separately, you are not eligible to convert your existing Traditional IRAs into a Roth IRA.
  

What are the tax consequences?

• When you convert or rollover an existing IRA into a Roth IRA, you may have to pay taxes on any earnings and pretax contributions that you convert.^†

When can I withdraw my funds?

• You can withdraw funds at any time before reaching 59 1/2, but your withdrawal is then subject to a 10% IRS early withdrawal penalty and any additional bank penalties that may apply.
• The following exceptions apply to the early withdrawal penalty:^††

Disability Qualifying medical expenses (under certain conditions) Qualifying education expenses Unemployment (under certain conditions) Qualifying first home purchase Death Levy

What is a qualified Roth distribution?

 A qualified Roth distribution is a distribution of assets that are held in a Roth IRA for at least five taxable years (beginning with the first taxable year for which the Roth IRA holder made a Roth IRA contribution of any kind to any Roth IRA) and one of the following events occurs:

• Attainment of age 59 1/2
• Disability
• First time home purchase
• Death

A qualified distribution from a Roth IRA may be withdrawn tax and penalty free* (bank fees may apply if you are breaking terms before account maturity).

What is a nonqualified Roth distribution?

A Roth IRA distribution which does not meet both of the qualification requirements is a 'nonqualified' distribution.

Am I required to take distributions?

• Unlike Traditional IRAs, there is no required minimum distribution at age 70 1/2.
• Your earnings can continue to grow until you need them.

 

^† Certain qualifications apply. Consult your tax advisor for more information.
^†† Your tax advisor and the IRS will need to determine if the exceptions apply.