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.