Archive for June, 2010
Investment Income Retirement
Wednesday, June 30th, 2010
Some Things You Should Know About Roth IRA Investing (individual Retirement Account)
I have been writing a lot about Roth IRA investing lately, and I think I should write this to clarify one or two points. You know of course that the Roth IRA was named after its main sponsor Senator William Roth from Delaware. You also know that contributions are made from after tax dollars and that the money that the Roth IRA earns is tax free forever.(as long as the account owner is fifty nine and one half years of age, and the account has been in operation for five years).
There is no required mandatory distribution at the age of seventy and one half years of age. And you can continue to contribute as long as you have earned income. Again all withdrawals remain tax free, (After five years). The contribution limit is $5000.00 until the age of fifty, then it becomes $6000.00. normally you can contribute to a Roth IRA investing plan if you have taxable earnings. You can contribute to your or your wifes Roth IRA investing plan no matter how old you are.
Passive income such as interest, rental income and dividends, are not considered as earnings for the purpose of funding an IRA. The tax deferred status of the IRA could be questioned if you break the rules, and this could lead to disqualification of the account with the accompanying tax penalties.
If you undertake a prohibited transaction in connection with your Roth IRA investing plan, the account stops being an IRA on the first day of that year. The account is treated as if it has distributed its assets to you at fair market value, and you will have a taxable gain thats included in your income. If you withdraw contributions by the due date of your return for that year, the contributions are treated as if you never made them. You can withdraw your contributions and earnings by the extended due date if you have an extension to file your return. The withdrawals of your contributions are tax free, but you must include the earnings on the contributions in income for the year in which you made the contributions.
You are not required to take distributions at any age, The minimum distribution rules that apply to traditional IRAs do not apply to Roth IRAs while the owner is alive.
Not everyone wants the trouble of buying and selling property with the attending risks. If you would like to know about a more TURNKEY approach to real estate and IRAs, go to the url at the bottom of this article and from there to my website, where you will find more information.
About the Author
Gordon Hall is an ardent reviewer of IRAs and other Retirement Funds. Visit his website now at http://www.double-your-ira.com to discover which retirement funds Gordon recommends after far ranging and extensive comparisons.
Step #1 – Retirement Preparedness Checklist: Create Personal Financial Statements
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