Roth IRA rules are a lot more flexible than other investments. You really need to make sure that you understand the right rules for the right investments, because getting them confused is easy. Roth IRA contributions are not tax-deductible, which is one of the biggest differences between these accounts and other IRAs. Tax free withdrawals are offered on these accounts, but only if you follow the rules first and get to a point where you are eligible for them. You need to understand contribution limits ($5,000 and $6,000 for those under and over age 50 respectively in 2010), income limits, and other elements that will determine what you can invest, when you can withdrawal, and other details of your investment.
» Read more: Roth IRA Rules- What You Should Know
Archive for November, 2009
Roth IRA Rules- What You Should Know
November 27th, 2009A Roth IRA Is a Gift That Keeps On Giving
November 3rd, 2009With a Roth IRA, you are not obligated to receive the required minimum distributions (RMD) and because of that, you could pass your Roth IRA savings to your children or even your grandchildren!
Kelley Greene posted a great article that will help you understand how this could be done.
Here’s an excerpt from her article:
“If the surviving spouse then names his or her children as equal beneficiaries of the same Roth IRA, they can indeed split it in half, and it is to their advantage to do so. Any heir other than a spouse who treats the account as his or her own had to take required distributions from a Roth IRA, starting by Dec. 31 of the year after the year of the previous owner’s death. If the children keep the account intact, and they want to stretch withdrawals across their life expectancies, they are limited to using the older child’s age. But by splitting the account, each sibling can stretch those distributions across his or her own life expectancy, Mr. Jones says. That means the younger sibling can spread those withdrawals across more years, leaving more assets in the account for a longer time and possibly reaping more tax-free earnings.”
