Terms of Use

What is a Roth IRA?

The purpose of a Roth IRA is to put away money for retirement.  Roth IRAs offer tax-free growth and tax-free qualified withdrawals in retirement.

Roth IRAs are funded with after-tax dollars unlike Traditional IRAs, so the contributions are not tax deductible but qualified distributions are tax-free.  

To be classified a Roth IRA, the account or annuity must be designated as a Roth IRA when it is set up. 

Under recent law, employers can now offer Roth SEP IRAs and Roth SIMPLE IRAs. Employees can elect to have employer contributions made to these accounts on an after-tax basis.

Who can contribute?

Generally, you can contribute to a Roth IRA if you have taxable compensation (this can be in the form of wages, salaries, tips, professional fees, bonuses, etc.).  

To be eligible to make a contribution to a Roth IRA, your modified adjusted gross income (MAGI) must be less than a stated amount, depending on tax-filing status.  

You can contribute at any age as long as you have eligible earned income.  . 

Are contributions tax-deductible?

No, contributions to the Roth IRA are not tax-deductible. However, the benefit comes later since earnings and qualified withdrawals are tax-free.  You may qualify for the Saver's Tax Credit (a retirement savings tax credit) if you meet certain income and filing requirements, so be sure to check with a tax professional. 

When can I make withdrawals?

After funds have been in a Roth IRA for five years, you can make tax-free withdrawals after age 59-1/2.  Early withdrawals or distributions from a Roth IRA are normally subject to a 10% additional tax penalty. 

Funds may be withdrawn without penalty for certain circumstances such as the purchase of a first home, pay for higher education, or for disabilities.

With a Traditional IRA, you must make mandatory withdrawals called RMDs after reaching age 73.  With a Roth IRA, you don't have to make mandatory withdrawals.

If you satisfy the requirements, qualified distributions are tax-free. You can leave amounts in your Roth IRA as long as you live.

What are the Roth IRA contribution limits?

What are the income limits for contributions to a Roth IRA?

Saver's Tax Credit (2026)

The income limits for the Saver’s Credit have also increased for 2026. To be eligible for the credit (10%, 20%, or 50% of your contribution), your Adjusted Gross Income (AGI) must not exceed:

• Married Filing Jointly: $80,500
• Head of Household: $60,375
• All Other Filers: $40,250

If your adjusted gross income exceeds these limits, then you are no longer eligible to contribute to a Roth IRA.  You may consider a Backdoor Roth IRA conversion strategy to still get money into a Roth.  Speak to a tax professional or investment advisor.

Contributions to spousal Roth IRA

With a Roth IRA your spouse can also qualify for a contribution (even if your spouse has little or no compensation) as long as you file a joint tax return.

When to make contributions?

Contributions to a Roth IRA can be made at any time during the year or by the due date of your return for that year (not including extensions).  If you want to make a Roth IRA contribution for this year, you could make it anytime between January 1 and April 15 of the next year.

For complete information and definitions of terms, get Publication 590 “Individual Retirement Arrangements” at https://www.irs.gov/uac/About-Publication-590A