TD Ameritrade

Benefits of a Roth IRA

  • Withdrawals of contributions are free from federal income tax
  • Withdrawals of earnings are free from federal income tax, provided that
  •    - you are purchasing your first home ($10,000 lifetime max)

       - the Roth IRA has been in existence for at least five years

       - you are age 59½ or older

       - you become disabled or have passed away

  • Required Minimum Distributions (RMDs) are not required

Eligibility Requirements

Effective January 1, 2010, you can convert a Traditional IRA to a Roth IRA regardless of your income level. Prior to 2010, individuals or couples with modified adjusted gross income in excess of $100,000 were ineligible to convert retirement savings to a Roth IRA.

Cost of Converting

When you convert to a Roth IRA, you must pay income tax on the otherwise taxable amount of the transfer. To maximize the benefits of conversion, the money to pay those taxes should come from a source outside the Traditional IRA you are converting. You may convert your Traditional IRA over several years to manage the tax consequences.

Check the background of TD Ameritrade on FINRA's BrokerCheck