Archive for March, 2008:
Roth IRA
Roth IRA is an individual retirement arrangement that, except as explained below, is subject to the rules that apply to a traditional IRA. It can be either an account or an annuity. Individual retirement accounts and annuities are described in Traditional IRAs.
To be a Roth IRA, the account or annuity must be designated as a Roth IRA when it is set up. A deemed IRA can be a Roth IRA, but neither a SEP-IRA nor SIMPLE IRA can be designated as a Roth IRA. Unlike a traditional IRA, you cannot deduct contributions to a Roth IRA. But, if you satisfy the requirements, qualified distributions (defined in Publication 590) are tax free. Contributions can be made to your Roth IRA after you reach age 70 1/2 and you can leave amounts in your Roth IRA as long as you live.
Details about Roth IRAs are contained in Publication 590, Individual Retirement Arrangements (IRAs) and include:
- Setting up your Roth IRA
- Contributions to your Roth IRA; and
- Distributions (withdrawals) from your Roth IRA.
Investing basics and lots of other tips are included at Get the Facts: The SEC’s Roadmap to Savings and Investing, information provided by the Securities and Exchange Commission.
“Managing Your IRA” video - a discussion on basic principles of investing. (3:00 min.)
Taxation of pension income - including distributions from Roth IRAs - is covered at Link and Learn Taxes, a self study course on the IRS web site.
More IRA Resources
- Publication 590, Individual Retirement Arrangements (IRAs)
- Publication 560, Retirement Plans for Small Business (SEP, SIMPLE, and Qualified Plans)
- Frequently Asked Questions regarding IRAs
- IRS Forms and Publications for your Roth IRA
Web Site Resources
- FirstGov.gov is a one stop portal to access all federal government public web sites.
- The latest retirement plan information can be found at www.irs.gov/ep.
- General tax information for individuals and businesses is located at www.irs.gov.
- Other retirement plan information can be found on the Department of Labor’s Employee Benefits Security Administration (EBSA) site.
- The Social Security Administration site has information on your Social Security retirement benefit to help you plan your retirement savings strategy.
- The Securities Exchange Commission (SEC) has many publications on investing and more.
- The Federal Deposit Insurance Corporation (FDIC) site explains how to determine whether your IRA account is covered by deposit insurance.