What is a Roth-IRA?
A retirement account that can create Tax Free Income for participants and beneficiaries.
Two Types of Roth-IRAs
- Annual Contributions
- Conversion from IRA or 401(k) to Roth-IRA. Amount converted is subject to Income Taxes
|Inherited by Spouse||Yes||Yes|
|Inherited by Non-spouse||No||Yes|
- Ordering Rules for distributions
- Roth-IRA Five-Year Rules – You Can Have More Than One
- Pro-Rata Rule for IRAs:
If you have after-tax contributions in an IRA, the IRS looks at the balance of all your IRAs in calculating the percentage of after-tax dollars converted for a partial conversion
Caution: Age 70 1/2 Required Minimum Distribution must be taken before converting to a Roth-IRA
For a Roth-IRA Conversion analysis or questions email Harry Rubins.
General information only – review with your tax advisor before taking action.