For people who want more discretion over when they take distributions from their retirement account, a Roth IRA may be an ideal option. You can invest up to $5,500 of earned income, tax-free (or up to $6,500 if you are over 50), and unlike Traditional IRAs you are not required to take distributions at age 70 ½, and you can continue making contributions with earned income at that point. Speak with a professional at First National Bank Southwest to see if a Roth IRA is right for you.
- Individuals can invest up to $5,500 of earned income, tax-free. Those 50 and over can contribute up to $6,500
- Unlike a Traditional IRA, there is no requirement to take a minimum distribution at age 70 ½
- Anyone with earned income is eligible
- Contributions are not tax-deductible
- Traditional IRAs can generally be converted to Roth IRAs, although tax consequences may apply†
- Funds can be withdrawn without penalty once you reach the age of 59 ½, or before that subject to a 10 percent penalty unless exceptions apply††
- 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 ½
- Qualifying first time home purchase
- A qualified distribution from a Roth IRA may be withdrawn tax and penalty free (bank fees may apply if you are breaking terms before account maturity)†
† Certain qualifications apply. Consult your tax advisor for more information.
†† Exceptions allowing for non-penalty early withdrawals include disability, qualifying medical expenses (under certain conditions), qualifying education expenses, unemployment (under certain conditions), qualifying first home purchase, and death.
Other Investment Options
Ask us about other investment options through Investments & Planning.
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