Roth IRA Companies
Roth IRA companies are different from traditional IRA companies in a few key ways. The biggest difference between the two account types is how taxes are calculated on them. If you have a traditional IRA, they take out taxes when you contribute to the account. For a Roth account, you pay taxes when you contribute.
However, Roth accounts are still one of the most popular ways to save for retirement. The money you invest in them can grow free from taxes until certain conditions are met. Some customers still wish they could self-direct their funds. Even if your current company does not allow self-direction, it is not hard to transfer.
You can jump-start a Roth IRA by converting to a traditional one. The conversion may be a taxable event, but the investment will grow tax-free. Now, there are no longer income limitations for this conversion move.
If you hold a Roth IRA, you can continue contributing until you die. There are no required distributions at any time, even after 70 1/2 years old. In many cases, Roth IRA holders may withdraw the principal amount without incurring taxes.
Income Limits and Eligibility
To qualify for one of these accounts, people must earn less than a certain limit. If you earn more than $144,000 as a single person, you are not eligible. Married applicants can earn up to $214,000 while still maintaining eligibility. Once you are over 50, you can contribute an additional $1,000. Your annual limit goes from $6,000 to $7,000.
