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Roth IRAs: Conclusion

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Like the Traditional IRA, Roth IRAs are flexible, and they are a popular way for individuals to save for their retirement. Roth IRAs differ, however, because assets can grow on a tax-free basis.

Let's recap:
  • Any individual who pays income tax may establish and fund a Roth IRA.
  • Rental income, interest and dividends and other amounts generally excluded from employer-paid income are not eligible as compensation for contributing to a Roth IRA.
  • A Roth IRA can be funded from your own contributions, spousal contributions, transfers and rollovers.
  • A Roth IRA must be established with an institution - such as a bank, brokerage or other financial institution - that has received IRS approval to offer IRAs.
  • All IRA contributions must be made in cash. Participant contributions cannot be made in the form of securities.
  • IRAs cannot invest in collectibles but can invest in U.S. gold coins, silver coins and certain other precious metals.
  • Qualified distributions from Roth IRAs are tax and penalty free, but non-qualified distributions may be subjected to tax and early-distribution penalty.




by

Denise Appleby

Denise Appleby
Denise Appleby is founder and owner of Appleby Retirement Consulting,which provides technical consultation, content, coaching, writing, editing and training services on related topics.


With more than 14 years of experience in the IRA and defined-contribution plans fields, Appleby has held several senior retirement-plan related positions with Pershing LLC, which included vice president of plans products and services, retirement plans manager, trainer, training manager, compliance consultant, technical help desk manager and writer.

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