The Roth IRA* gives you the ability to invest your after-tax dollars today, let the investment grow tax-free, and withdraw your principal and earnings tax-free after five years and reaching age 59½. (Disbursements outside of the five year/age 59½ rule may result in tax and/or penalties on any earnings withdrawn.) You simply need to have earned income equal to the amount you contribute up to a maximum amount set by the IRS for your filing status each year. Dividend compounding can help your investment grow substantially.
Both savings and certificates accounts are available
Funds can be used for higher education, penalty-free**
Contributions have already been taxed, therefore no minimum distributions are required
There is no 70½ age limit on making contributions
Catch up contributions may be made by individuals attaining age 50 by December 31st of the tax year for which the contributions are made
2010 Contribution Limits
The maximum contribution limit for 2010 is the lesser of $5,000 or your taxable compensation. A $6,000 contribution is permitted for individuals attaining age 50 by December 31, 2010.
2009 Contribution Limits
The maximum contribution limit for 2009 is the lesser of $5,000 or your taxable compensation. A $6,000 contribution is permitted for individuals attaining age 50 by December 31, 2009.
*IRA deposits separately insured by NCUA up to $250.000
** Please consult your tax advisor who can evaluate your individual situation with regard to IRAs.