Wiley Series 26 Exam Review 2016 + Test Bank by Securities Institute of America

Author:Securities Institute of America [Finra]
Language: eng
Format: epub
ISBN: 9781119138747
Publisher: Wiley
Published: 2015-11-02T00:00:00+00:00

Roth IRA

A Roth IRA is a nonqualified account. All deposits that are made to a Roth IRA are made with after-tax dollars. The same contribution limits apply for Roth IRAs. An individual may contribute the lesser of 100% of earned income, to a maximum of $5,500 per person, or $11,000 per couple. Any contribution made to a Roth IRA reduces the amount that may be deposited in a traditional IRA, and vice versa. All contributions deposited in a Roth IRA are allowed to grow tax deferred, and all of the growth may be taken out of the account tax free, provided that the individual has reached age 59-1/2, and the assets have been in the account for at least 5 years. A 10% penalty tax will be charged on any withdrawal of earnings prior to age 59-1/2, unless the owner is purchasing a home, has become disabled, or has died. There are no requirements for an individual to take distributions from a Roth IRA by a certain age.

The following table details contribution limits that have been in place for IRA contributions for the last several years:

Year Age 49 & Below Age 50 & Above

2012 $5,000 $6,000

2013 $5,500 $6,500

2014 $5,500 $6,500

2015 $5,500 $6,500

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