How do I invest in Roth IRA?

Average Americans in America have reached retirement age. Recent questions regarding the future and benefits of Social Security have made retirement planning a critical part of every person’s financial life. You can see gold self directed ira for more information.

A number of individuals begin retirement planning by opening an Individual Retirement Account. If you are thinking about such accounts, you should think about a Roth IRA. A Roth IRA offers many important features that make it different from a traditional IRA.

Roth IRA was established in 1997 when Congress passed the Taxpayers Relief Act. It is designed to encourage investments by American citizens. An American citizen can open one through a bank, or an independent brokerage service. Depositions are not subject to age limitations.

Roth IRA is a great investment option. The savings are tax-free. Individuals can withdraw money up to retirement age. This income is not subject tax by the IRS.

Roth IRA permits individuals to withdraw any investment at any time tax-free.

Tips to get a Roth IRA

The qualification criteria for a Roth IRA is dependent on income and tax filing status. Solo taxpayers have the right to invest maximum amount in their Roth IRA if they have an AGI (Adjusted Gross Income) of less than $95,000

Individuals who have an AGI greater than that amount can still invest but with a lower maximum. A Roth IRA cannot be opened to an individual whose AGI is higher than $110,000.

For married taxpayers filing separate returns, the limits are $150,000 per year for maximum investments, and $160,000 per year for reduced contributions.

There are limitations on how much an individual can invest to an IRA. The maximum amount an individual can invest in an IRA is $3,000 for 2004, $4,000 for 2005-2007 and $5,000 for 2008.

Catch-up investing is an extraordinary stipulation for older investors. Currently, the IRA adds an average of $500 to the account for individuals older than 50 years.