Tackle Today: The Power of the Roth IRA
October 13, 2022
«ROTH IRA = Tax-Free Growth.»
Traders,
Roth IRAs are a powerful account used by traders to score tax-free growth. Let’s explore a little more about how they work.
- Anyone who has earned income can fund a Roth IRA if they don’t make too much money. For 2022 if you’re married and filed jointly you can’t make more than $204k to qualify for maxing out a Roth IRA.
- The annual contribution limit is currently $6,000 or $7,000 if you’re over 50.
- If you’re married and your spouse has no earned income, you can still fund a ROTH IRA for them. That ups the annual amount for a couple to $12,000 or $14,000 if you’re over age 50.
- Roth IRAs don’t have Required Minimum Distributions which means you don’t have to start pulling money out in retirement. This contrasts with traditional IRAs and 401ks, which require you to take distributions and pay taxes even if you don’t need the money.
- These days, you can use a wide variety of options strategies in a ROTH IRA, making them nearly as flexible as a taxable investment account.
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