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Is a Roth IRA right for you?

A Roth IRA is an individual retirement account that offers the opportunity for tax-free income in retirement. Annual contributions are taxed upfront and all earnings are federal tax-free when they are distributed according to IRS rules. This is much different than a Traditional IRA, which taxes withdrawals. Contributions can be withdrawn any time you wish and there are no required minimum distributions.  If you are in a lower tax bracket today than you will be during retirement, a Roth IRA may be a smart choice.

Open a Roth IRA

Benefits of a Roth IRA

  • Withdrawals of earnings are free from federal income tax, provided the Roth IRA has been in existence for five years and you are at least 59½.
  • Contributions can be withdrawn anytime without federal income taxes or penalties.
  • RMDs (Required Minimum Distribution) are not required.
  • Distributions for your beneficiaries are tax-free.

Why open a TD Ameritrade Roth IRA?

  • Breadth of Investment Choices - Including commission-free ETFs, no-transaction-fee mutual funds1, fixed income products, and much more.
  • Empowering Education - We offer exclusive videos, useful tools, and webcasts to help you create a personalized retirement plan.
  • Smart Tools – Plan and evaluate your retirement strategy with helpful tools like the IRA Selection Tool and Retirement Calculator.
  • Fair and Objective Research - Take control with objective third-party research provided by Morningstar Investment Management, CFRA (formerly S&P Capital IQ), and Market Edge

Roth IRA Rules

Eligibility

To contribute, you must earn income. There are no age limits.

Income Limits

2020

If you are single, $124,000 or less

If you file jointly, $196,000 or less

 

2021

If you are single, $125,000 or less

If you file jointly, $198,000 or less

Contributions

Are not tax deductible

Maximum Contributions

2020 and 2021

Up to age 50: $6,000

Age 50+: $7,000

Non-income-earning spouse: $6,000 (into a separate IRA)

Earnings

Grow tax-free

Distributions

Free from federal income tax when:

- The Roth IRA account has been open for at least 5 years

-You are age 59 1/2 or older

Required Minimum Distributions

Are never required

Early Withdrawals

Before age 59 1/2 are subject to a 10% penalty in addition to any ordinary income tax that may be due

  • Roth IRA vs. Traditional IRA

     

    Need help deciding between a Roth IRA and a Traditional IRA? Try our IRA Selection Tool or view a comparison chart to find out which IRA is right for you.


  • Considering a Roth IRA conversion?

    Consider taking advantage of every savings strategy you can. Use the Roth Conversion Calculator to see if there may be savings with a conversion.


  • Keep your old 401k working for you

     

    Have you changed jobs or planning to retire? Learn about the benefits of rolling over your old 401k to a TD Ameritrade IRA.

Get in touch Call or visit a branch

Call us: 800-454-9272

175+ Branches Nationwide

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