There is no need to explain about the benefits, that Roth IRA offers when deciding upon the plans for retirements, because the list has an adherence to opportunity on reducing the burden of tax in a great manner. However, one who is going to invest in Roth IRA has to look at the eligibility criterion (contribution limits) as a serious issue, so that it may not affect him/her later. To fully understand the limitations, browsing the page roth-ira.org, would definitely be a perfect move to proceed on Roth IRA.
Eligibility Rules
To contribute under Roth IRA, the federal government has imposed some criteria which should be strictly followed; anyhow these rules are less stringent when compared to other retirement plans such as traditional IRA’s.
The most important rule to be notified is that you should be having some source of income (may be bonus, salary…Etc). The other rules such as age limitations that are imposed on traditional IRA plans are eliminated. This means that the person should be a having an income and can be of any age. Contributions can also be made by the spouse, considering the income rule alone. The income per annum should also not exceed beyond $107,000 in 2011 for single filers and $169,000 in 2011 for joint filers (the adjusted gross income is subjected to change every year).
Contribution issues
The next query that arises is how much am I allowed to contribute for my Roth IRA?
In 2007 the contribution limit was set upto $4000 per year and from 2008-2011 it was raised to $5000. In 2012 it may be $5000 + inflation. There is also some catch up limits such as after the age of 50.5 years he/she is allowed to contribute an additional $1000. Remember that the withdrawals are allowed only after a seasoning period (five years) and after the age of 50.5 years.
Time for retirement
So it’s wise to think at these values which are being offered under Roth IRA when it comes to make a crucial move of taking a retirement plan.
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