Best Roth IRA Providers of 2020

One of the most effective savings and investment tools for people is a Roth Individual Retirement Account or Roth IRA. This investment vehicle provides those seeking to maximize their returns with a flexible and powerful tool to bolster their portfolio. Compare the top Brokerage firms and find a company and IRA plan that suits your retirement needs.

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Bolster Your Retirement with a Roth IRA

Investors seeking a safe and effective form of bolstering their savings over time may feel intimidated by the sheer array of investment vehicles available on the marketplace. From stocks and bonds to real estate and collectibles, there are a bevy of investment tools at your fingertips to help you realize your retirement savings goals.

Not only does a Roth IRA provide tax advantages to investors, but they also are becoming more available through employers. Learn below of the benefits of a Roth IRA and how it can put you on the fast-track to robust financial freedom.

Everything You Need to Know about a Roth IRA

A Roth IRA provides a tax-free retirement savings vehicle for investors. This tool enables you to allocate capital that you have paid taxes on already to your savings in an account that facilitates your ability to grow and protect your assets without the burden of further tax liabilities. Furthermore, when the time comes for you to withdraw funds from your account at your retirement, you will not have to pay any taxes on your money. You also have the flexibility to withdraw funds prior to your retirement, should you need capital in an emergency or for a life-changing opportunity, without any punitive tax liabilities.

Roth IRA versus a Traditional IRA

There are a selection of IRA plans in the marketplace for investors. In contrast to the Roth IRA, a traditional IRA provides investors with comparable retirement savings potential. Investors are not obligated to pay taxes on the funds they contribute to their account. This includes all capital gains, interest accrued as well as dividends that are earned and compounded over time. However, should investors choose to withdraw their money prior to the predetermined date of exit, they will be responsible for taxes.

Roth IRA Eligibility Requirements

Individual investors with an adjusted gross income under $129,000 are eligible for contributing to a Roth IRA, while married couples with a combined income under $191,000 are eligible to participate. There are no age requirements for opening a Roth IRA account, regardless if you have accumulated income through investments, employment, self-employment and/or alimony payments.

Contribution Guidelines

The amount of money you are able to invest in your Roth IRA varies depending on your adjusted gross income. For example, you have the ability to contribute the maximum of $5,500 annually, if you are single with an income of less than $114,000 or married with a joint adjusted gross income of $181,000. These contributions can be made at any time during a tax year or up to April 15 of the subsequent calendar year.

Employer Options

Companies throughout the United States have begun to include a Roth IRA option within their employee retirement 401k plans. Post-tax funds are deposited into the account, whereby your capital will accrue and grow without any tax obligations. Participants are eligible to allocate a maximum of $17,500 a year, which can be matched by an employer in a 401k savings plan. Investors over the age of 50 may allocate an additional $5,500 annually in meeting their retirement objectives.