A Roth IRA continues to be a popular investment choice for building a secure retirement.  As with most investments, the more money you put in, the more money you’ll get out.  Unfortunately, there are limits to how much you can put into your account.  There are also limits on how much money you can make and still put money into your account.  Here’s a quick review of what those limitations are.

Roth IRA Contribution Limits

As of 2010, individuals can contribute as much as $5000 per year. The contributions into a Roth IRA are made with after-tax money.  If you are over the age of 50, you can make catch-up contributions; you can contribute as much as $6000 per year to your Roth IRA account.

Roth IRA Income Limits

There are limitations to how much money you can make and still contribute to a Roth IRA.  As of 2010, if you are an individual, you can make as much as $105,000 and still make the full $5000 or $6000 contribution, depending on your age. If you make between $106,000 and $120,000, you can make a partial contribution to the Roth IRA. If you make more than $120,000, you cannot contribute to your Roth IRA account.

There are also phase-out limits that allow you to make a partial contribution if your income is within a certain range.

If you are a married couple and you file your taxes jointly, you can make more money and still qualify for Roth IRA contribution. You can make as much as $167,000 and still make a full contribution to your Roth IRA. If you make between $167,000 and $177,000, you will be eligible to make a partial contribution. If you make more than $177,000, you can forget about making a contribution to your Roth IRA; you don’t qualify.  If that is the case, you may want to consider investing in a traditional IRA because there are no income limits associated with it.

Here’s how it looks:

Age Limits

With the Roth IRA, there are no age limits to be concerned with; you can contribute to the account regardless of your age.  However, except under certain “qualified” circumstances, you have to be 59 1/2 in order to start taking withdrawals out of the account and avoid withdrawal penalties.

The Roth IRA is famous for its ability to earn compound interest tax-free.  Less well known is the fact that an investor doesn’t have to have his IRA administered by a financial institution; they can administer their account themselves by selecting the “self-directed” option when the account is set up.

You Control the Account Money

With a self-directed IRA, one simply sets up an LLC which holds the account funds.  One-hundred percent of the capital gains from investments and the profits from business transactions stay in the LLC account, with no taxes due on the profits.

continue reading..

Investors are often confused about what they can and can’t do with their Roth IRA.  The Roth is so flexible compared to other retirement vehicles that much is written – sometimes incorrectly – about how the IRA funds can be withdrawn.  Here’s a quick look at which distributions are qualified, and which are not.  For further clarification, see you Roth IRA professional.

continue reading..

Probate is the mechanism whereby estates are settled.   When you die, the value of everything you own and everything you owe is added up, the debts subtracted from the assets, and the balance distributed to your heirs.  If there is insufficient money to pay all the debts and taxes, your property is sold, generally at auction, to raise cash so that the final bills can be paid.  The process is controlled by an estate executor, appointed by you in your will, or by the probate court if you don’t have a will.

continue reading..