Roth IRA

The Roth IRA provides no deduction for contributions, but instead provides a benefit that isn't available for any other form of retirement savings.

If you meet certain requirements, all earnings are tax free when you or your beneficiary withdraw them. Other benefits include avoiding the early distribution penalty on certain withdrawals, and eliminating the need to take minimum distributions after age 70½. Contact one of Customer Service Representatives for terms, rate, and additional information.

  • You can establish a Roth IRA by making a regular contribution to a Roth IRA or by converting a traditional IRA to a Roth IRA.
  • You may be eligible to make a regular contribution to a Roth IRA even if you participate in a retirement plan maintained by your employer
  • In order to be eligible to contribute to the Roth IRA, you or your spouse must have compensation or alimony income equal to the amount contributed. And second, your modified adjusted gross income can't exceed certain limits.
  • These contributions can be as much as $5,000 for 2009 ($6,000 if you're 50 or older by the end of the year).
  • The chief reason is that the Roth IRA is effectively bigger than a regular IRA because it holds after-tax dollars. If you can take advantage of this feature of the Roth IRA by maximizing your contributions you'll add greater tax leverage to your retirement savings.
  • One significant advantage to a Roth IRA is that the minimum distribution rules don't apply. If you're able to live on other resources after retirement, you don't have to draw on your Roth IRA at age 70½. That means your earnings continue to grow tax-free.
  • The other big advantage is the ability to take certain early distributions without paying the early distribution penalty. The Roth IRA makes it easier to keep your money in, and also easier to take your money out.

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