Roth IRA

Roth IRA with

Mature Texans Financial Solutions

Roth IRAs are tax-free savings plans that allow you to save for retirement with after-tax dollars. In these plans, contributions are tax-free and can be withdrawn anytime. The contributions and all income grow tax-free, allowing your savings to compound, which increases the annual yield until you begin making withdrawals. Read below to learn more about Roth Contributions, Roth IRA Conversions, and Inherited Roth IRAs.

Roth Contributions:

Contributions to a Roth IRA are not tax deductible. However, you have the flexibility to withdraw your contributions at any time tax-free. Regarding earnings, if your withdrawals qualify, they are considered qualified distributions. Once you reach the age of 59½, and your account has been in existence for at least five years, these withdrawals become both tax-free and penalty-free.

Furthermore, there is no obligation to withdraw funds from your Roth IRA during your lifetime.

Roth IRA Conversions:

There are various compelling reasons why opting for a Roth IRA conversion can prove advantageous, especially for retirees and their beneficiaries. Notably, a Roth Conversion facilitates tax-free growth. While you incur income tax on the converted funds, they accumulate tax-free once they reside in the Roth. Once in the Roth IRA there are no more Required Minimum Distributions (RMDs).

Inherited Roth IRA:

The Secure Act 2019 changed the inherited rules for Roth IRAs. Your spouse may take over the contract as the new owner with the same benefits as you. Non-spousal beneficiaries inheriting a Roth IRA the proceeds are still tax-free, if the 5-year rule has been met. They must liquidate at the end of the 10th year period after the owners death.