1. Roth IRAs: Introduction
  2. Roth IRAs: Eligibility Requirements
  3. Roth IRAs: Contributions
  4. Roth IRAs: Distributions
  5. Roth IRAs: Conclusion

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. Regular 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.

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