Roth-IRA – Contribution and Eligibility limits.

You all must be quite familiar with the Roth IRA or the Individual retirement scheme which has become renowned among the people of today. The withdrawals from this account are tax-free, which makes it one of the most sought after retirement schemes of the present. More information on Roth-IRA can be got by visiting roth-ira.org.

We talked about withdrawals in the first para. Tax-benefits can be made use of only when a person withdraws from the Roth account. Tax-free withdrawals, obviously comes with a pay. There are basically 2 criterion to be fulfilled.

(i) The person should be or over the age of 59.5
(ii) He/she should also be maintaining an account , for a minimum period of 5 years.
As far as contribution limits are concerned : Contributions cannot be over and above $4000 or 100 of the AGI or Adjusted gross income, comparatively whichever is lesser. Another thing to be kept in mind is that, the contribution can be made in any form , i.e it may be in the form of wages, salaries and what not? or in other words : Compensatory income.

Eligibility limits :
(i) A person who’s single can contribute if and only if , his/her AGI or Adjusted Gross Income is less than $95,000.
(ii) Married couples also have a take in it. They can also contribute to their Roth account, provided they file a joint tax return. As far as the contribution limits are concerned , the AGI requirement for them would be $1,50,000 ( When the contributions made are joint ). If they are contributing separately , then their AGI shouldn’t exceed $100,000.
Hope this article helped you get a real picture as far as , contribution and eligibility conditions are concerned. It’s never too late to think about retirement. Remember the early you start, the more you save!