Roth IRA

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The Basics:
Passed into law in 1997, the Roth IRA is a great way to save for retirement because earnings on your investments are free from federal income tax as long as certain conditions are met. Another advantage of a Roth IRA is that contributions may be made even after you are 70½, and you are not required to take distributions. In most cases, a Roth IRA holder may withdraw the principal amounts (your contributions) invested without any tax liability.

Funding Your Self-Directed Roth IRA
A Roth IRA may be funded with a contribution or by converting Traditional IRA funds to a Roth IRA. While converting from a Traditional to a Roth IRA is a taxable event, your earnings will grow tax free. Contributions can be made yearly (see chart below for contribution limits).

Why Consider a Self-Directed Roth IRA?

• You want tax-free earnings and no taxation on withdrawals.
• You are already saving for retirement with an employer-sponsored plan.
• Your income does not exceed the income limits for contributing (see below).
• You want to invest a retirement plan but may need to access your savings.
• You expect your tax rate during retirement to remain the same or to be at a higher level than your current tax rate.

Please consult your tax professional for the plan that best suits your individual needs.

Roth IRA Eligibility

You can contribute to a self-directed Roth IRA if you have taxable income and your modified adjusted gross income is less than:

Married Individuals Filing Jointly:

• $179,000 for 2011
• $183,000 for 2012

Single or Head of Household:

• $122,000 for 2011
• $125,000 for 2012

Married Filing Separate Returns:

• $10,000