Roth IRAs

Contributions

If you are under 50 years of age, you may contribute $6,000 or 100% of your earned income per year, whichever is less. If you are age 50 or older, your contribution amount increases to $7,000 or 100% of your earned income per year, whichever is less. You may contribute to a traditional IRA, a Roth IRA, or a combination of the two. However, contributions to a Roth IRA must be aggregated with traditional IRA contributions to comply with the annual contribution limit.

Spousal Contributions

If you have little or no earned income, are married, and file a joint federal income tax return you may contribute using the spousal rules. If you and your spouse have a combined income of at least $12,000 and you are both under the age of 50, you may each contribute up to $6,000. If you and your spouse have combined income of at least $14,000 and you are both 50 or older, you may each contribute up to $7,000 to a Roth IRA.

Age Requirement

There is no maximum age for making a Roth IRA contribution; however, contributions must still be based on earned income. You are not required to take distributions from your Roth IRA during your lifetime.

Single Individuals

If you are single, you are eligible for the full Roth IRA contribution if your modified adjusted gross income (MAGI) is $122,000 or less for the year. In year 2019, if your MAGI is between $122,000 and $137,000, you can contribute to a Roth IRA, but not the full $6,000 ($7,000 if age 50 or older). If your MAGI is over $137,000, you are not permitted to contribute to a Roth IRA for the year.

Married Individuals, Filing Jointly

If you are married and filing a joint federal income tax return, you are eligible for the full Roth IRA contribution if your joint MAGI is under $193,000 for the year. If your joint MAGI is between $193,000 and $203,000 in 2019, you are eligible to contribute to a Roth IRA, but not the full $6,000 ($7,000 if age 50 or older). If your joint MAGI is at least $203,000, you are not permitted to make a Roth IRA contribution for the year.

Withdrawals

A withdrawal from a Roth IRA that is a qualified distribution is not subject to federal income tax and is not subject to the IRS 10% early distribution penalty. A withdrawal is a qualified distribution if it is paid:

• To you after you reach age 59 ½;
• To you when you are disabled;
• To you for a qualifying first-time home purchase; or
• To your beneficiary after your death.

And is not paid:

• During the five taxable year period that begins with the first taxable year that you make a Roth IRA contribution;
• If the Roth IRA is a rollover from an IRA other than a Roth IRA, during the five taxable year period that begins with the taxable year that the rollover contribution was made.

The IRS early distribution penalty does not apply to the conversion of a traditional IRA to a Roth IRA. Consult your tax adviser regarding eligibility, contributions and distributions. Withdrawals may be subject to early withdrawal penalties per investment account contract. Fees may reduce earnings.

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