Today’s Financial Planning tip will cover “What is a Roth IRA?”
A Roth IRA, is an Individual Retirement Account used by individuals to save for retirement with after tax income that grows tax free and distributions are tax free. However, there are certain rules and regulations that apply such as if you have owned your account for 5 years and if you are age 59 ½ or older. In addition, direct Roth IRA contributions are only allowed if your income (well, technically your Modified Adjusted Gross Income) is below a certain level. The contribution limits for Roth IRAs in 2018 is $5500 and $6500 if you are age 50 or older.
There are several factors to consider if a Roth IRA is the best way for you to save for retirement. Feel free to contact me to see if an Roth IRA or a Roth IRA Conversion also known as a backdoor Roth IRA is right for you. And remember to consult with your tax advisor for your specific tax related questions.
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Catherine Magaña is a CFP® or CERTIFIED FINANCIAL PLANNER™ in Carlsbad California. If you would like to set up a time to discuss your financial goals she can be reached at 760-692-5700, email@example.com or private message.
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