Roth IRA
A Roth IRA is an individual retirement account which allows a person to contribute a specified amount of after-tax income each year. Earnings on the account and withdrawals after age 59½ are tax-free.
Account Details
*All values are up-to-date as of 01/01/2023*
Annual Contribution Limits
- Contribute up to $6,500 or 100% of compensation, whichever is less.
- If you are age 50 or over, you may make an additional contribution of $1,000, for a total annual contribution of $7,500.
Eligibility
- Any individual with earned income at least equal to their IRA contribution (no age limit).
- Eligibility for a Roth IRA is determined by your income.
- Any individual who meets income and tax-filing criteria for full or partial contributions.
- If a joint return is filed, any nonworking spouse of a wage earner.
Taxes on Withdrawals of Earnings
If you are age 59½ or older:
- None if you’ve held the account five years or more; ordinary federal income tax if you’ve held the account less than five years.
If you are under age 59½:
- Ordinary federal income tax if you’ve held the account for five years or more, unless the distribution is due to your death or disability or for a first-time home purchase ($10,000 lifetime maximum); ordinary federal income tax if you’ve held the account for less than five years.
- State taxes may apply.
Penalty for Early Withdrawals
From contributions:
- None.
From earnings:
- No penalty if you’re age 59½ or older; 10% federal penalty tax if you’re under age 59½ unless an exception applies.
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