Roth IRA

A Roth IRA is much like a Traditional IRA. The big difference is the tax treatment. Contributions to a Roth IRA are not deductible, but your investment earnings over the years can be tax-free.

Roth IRAs allow you to invest after-tax dollars, let the investment grow tax-deferred, and take qualifying withdrawals tax-free. Roth IRAs have no age limit on those making contributions.

You can contribute:

  • At any age
  • If you have earned income from employment
  • Up to a maximum of $7,000 if your adjusted gross income is less than $146,000
  • Up to a maximum of $14,000 if you are married and filing jointly and have an adjusted gross income of less than $230,000

Increased Portability Between Plans

There is increased “portability” between retirement plans, allowing movement of money between Qualified Retirement Plans and Individual Retirement Accounts. Money can be moved from a Traditional IRA to a Roth IRA.

Withdrawal Requirements

Unlike Traditional IRAs, there is no required minimum distribution at age 72½. Your earnings can continue to grow until you need them.

Now is the time to get started. Call us today at (573) 634-0888 or stop by any location to create your retirement plan.

Traditional IRA vs. Roth IRA FAQs

Traditional IRA

A tax-deferred investment with a possible tax deduction if you do not have an employer-sponsored retirement plan or if your income is below certain levels.

Roth IRA

A tax advantage which is tax-free investment growth if the account has been open for five years or more and meets the qualified distribution rule. There are no tax deductions for contributions, but tax-free growth on compounded interest replaces this benefit.

Traditional IRA

Distributions must start by age 72½.

Roth IRA

There is NO requirement to begin withdrawals at age 72½.

Traditional IRA

Income tax is due on all withdrawals, and withdrawals made prior to age 59½ may be subject to an additional 10 percent IRS penalty.

Roth IRA

The investor's contributions to the account may be withdrawn at any time. But to qualify for tax-free withdrawal of investment earnings, the account must be open for at least five years and the account owner must be at least 59½ or purchasing a first home. (Under the new laws, even if you've previously owned a home, you may still qualify as a first-time home buyer). After the account has been open five years, death or disability also qualify for tax-free withdrawal of earnings.

Traditional IRA

For individuals who have earned income.

Roth IRA

For individuals of any age with earned income and adjusted gross income less than $146,000 for singles and adjusted gross income of less than $230,000 for those filing jointly.