Roth Ira AccountsIf you have earned income you qualify for this plan. Roth Ira's are funded with your after tax money (meaning you have already paid the taxes on this money). This also means you cannot use your contributions to this plan for tax deductions, as a Roth Ira's are not tax-deductible. Your income can be from wages, tips, self employment, taxable alimony payments. The agency/bank that sets up your Roth account should be able to verify that the Roth Ira's are retirement accounts that you put your after taxed income dollars into. So this means you are not taxed on this money when you withdraw it from your Roth Ira account. The nice thing about this account is you can start withdrawing from this plan at any age without any penalties. So this makes a great early retirement account. Pretty cool if you want to retire early before 59 1/2 and you have this plan available to you. With some pre-planning and early saving you could retire early and withdraw from this account until your other retirement accounts and/or social security are available without penalties. And since you already put in taxed income you won't have to pay taxes again on this money. So Bonus, Bonus, Bonus, not taxed on money when withdrawn, no early withdrawal penalties, and can withdraw before you turn 59 1/2 years of age. The only drawback to this account is that you can only put $5,000 a year into it, or if you are 50 years and older you can put $6,000 into it. A side note here; you may have to meet certain income requirements if you earn over $101,000 a year you may not be able to contribute to this plan. So again start early, start small and build up, pre-plan and you can retire early or have extra money during your retirement years. If you currently have a Roth 401(k) you may be able to roll it over to a Roth Ira account which has no distribution requirements unlike the Roth 401 which requires you to start receiving yearly distributions at age 70 1/2. If you are pre-middle aged, a Roth Ira account may be the way to go since it is more likely you'll be in a higher tax bracketwhen you retire. But if you are middle aged or older and are just starting out on your retirement savings you may not have to worry about a higher tax bracket, so the traditional 401 may be better and it is tax deductible. If you have an employer who offers a Roth 401(k) plan, you may be able to contribute up to $15,500 or $20,500 if you are age 50 or older. Check with your HR department and see if they offer a Roth plan or at least if they can check and see if they want to research a plan they may be able to offer to employees. So, a Roth Ira account would be a great addition to your Retirement Savings whether your just starting out or perhaps you've maxed out all contributions to your other retirement accounts. 457 - Deferred Retirement Plan
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