One of the best plans for making investment after retirement is Roth IRA. It is an incredible investment plan after retirement as it allows tax-free growth of your capital. If you have Roth IRA, you can make tax-free withdrawals after the age of 59 ½ compared to traditional IRA.
However, it is not possible for every individual to have a Roth IRA account, as there are certain terms and conditions. Therefore, if you fulfill all the criteria and meet the terms and conditions only then you are allowed to open a Roth IRA account to make investment. Below are certain eligibility criteria for opening a Roth IRA account.
So, first starts with the eligibility criteria to check either you are qualified for opening a Roth IRA account or not. There are very strict terms and conditions set by IRS about opening an IRA account. These terms and conditions change with the change of IRA type, I mean there are different terms and conditions for Roth IRA, traditional IRA and 401 K, and it is possible you will get confused with rules.
The next thing to be considered is income eligibility for opening a Roth IRA account. To make the most of a Roth IRA your earnings should be below a definite point according to the terms, and conditions lay down by the IRS. It depends of your financial statues, in category you fell. Your earnings have to be from job you carry out relatively than savings or leasing profits. The particular limits below are based on adjusted gross profits.
Below are some general rules about having a Roth IRA:
- For single individuals, if your earning is below $107,000, then you are fully allowed to invest all you are earning in Roth IRA account.
- For married couples, to invest income in Roth IRA, it should be less than $169,000.
- For divorced couples, if earning is less than $10,000 then you can fully invest in your Roth IRA account.
Lastly, now discuss about the contribution eligibility. If your income limit is less than the income limit stated above, you can invest in Roth IRA account to earn revenue on your capital. Any person with earnings less than above limits can open a Roth IRA to invest money for retirement. It is important to note that the contribution in a Roth IRA account also depends on individual age.
For individual’s age under 50, the contribution limit set by IRS is $5000 for making investment in a Roth IRA account. For married couples, both husband and wife can make a separate investment of $5,000 in Roth IRA for their retirement. For people of age above 50 there is an increase of $1000 in a contribution as individuals above 50 can invest $6000 in a Roth IRA.