Roth IRAs
A Roth IRA offers an alternative to a traditional IRA. You make contributions to a Roth IRA with your after-tax dollars and don't pay federal income taxes on your potential future earnings as long as certain qualifications are met.
Features Specific to Roth IRAs
- Contributions – Anyone who meets the guidelines for modified adjusted gross income may contribute to a Roth at any age.1 There is no tax deduction for your contributions.
- Tax Benefits – Any earnings are tax deferred and distributions may be totally income tax free, assuming they meet the criteria below.
- Distributions – Distributions of your contributions are always income tax free and can occur at any time. Distributions of earnings are also income tax free if your Roth IRA is at least five years old and if made for one of these qualifying reasons:
- Attainment of age 59½.
- First home purchase.
- Death or disability.
If earnings are withdrawn at other times, they incur a 10% IRS penalty unless an exception applies. With Roth IRAs, there are no required minimum distributions (RMDs) during the owner's lifetime.
Unlike with traditional IRAs, you are not required to begin taking distributions from your Roth IRA at age 70½. You may want to consider rolling over your assets from a qualified retirement plan, such as a 401(k), or from other IRAs into your Roth IRA.
Take the Next Step
Want to learn more? Contact a Thrivent Financial representative today to learn how a Roth IRA can help you meet your retirement goals.
Thrivent Financial for Lutherans and its respective associates and employees cannot provide legal, accounting, or tax advice or services. Work with your Thrivent Financial representative, and as appropriate your attorney and/or tax professional for additional information.
1 Must earn an annual modified adjusted gross income (MAGI) of under $122,000 for 2011 and $125,000 for 2012 (single), or $183,000 for 2010 and 2011 (joint). If you are a married taxpayer who files separately, consult your tax advisor.
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