Photo Credit Kelly Sikkema
Allowable Investments in a Roth IRA
Once the funds are contributed, a variety of investment options exist within a Roth IRA, including mutual funds, stocks, bonds, exchange-traded funds (ETFs), certificates of deposit (CDs), money market funds, and even cryptocurrency.
How Much Can I Put in My Roth IRA Monthly/Yearly?
In 2023, the maximum annual contribution amount for a Roth IRA is $6,500, or $541.67 monthly for those under age 50. This amount increases to $7,000 annually, or roughly $625 monthly, for individuals aged 50 or older. Note there is no monthly limit, only the annual limit
Who’s Eligible for a Roth IRA?
Anyone who has earned income can contribute to a Roth IRA—as long as they meet certain requirements concerning filing status and modified adjusted gross income (MAGI). Those whose annual income is above a certain amount, which the IRS adjusts periodically, become ineligible to contribute. 1st Capital has the specific charts and levels that apply according to your income and marital tax-status and filings.
The Bottom Line
A Roth IRA is an individual retirement account (IRA) that allows you to withdraw money (without paying a penalty) on a tax-free basis after age 59½, and after you have owned the account for its five-year holding period. If you buy a home, pay for college, or need your Roth funds for the birth or adoption of a child, you can also withdraw without paying a penalty.
For individuals who anticipate that they will be in a higher tax bracket when they are older or have retired, Roth IRAs can provide a beneficial option, as the money is not taxable, unlike a 401(k) or traditional IRA withdrawals. That option and flexibility is and will be paramount in planning for a strong later-life, retirement portfolio.
If you have been considering ways to have more “tax-free” Income in your later years, the Roth IRA is a tool you must consider. My team and I can help you with the details you need to be covered to properly set up this amazing tool as part of your future wealth. In April, I will highlight the power of another “tax-free” tool; The Index IUL.
Contact us at 312-952-8040/Cell * 312-836-3800/Direct Line * [email protected] * www.1stcig.com