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ROTH IRA's

A convenient way to save for retirement, the Roth IRA may offer greater tax savings and withdrawal flexibility than a Traditional IRA.  There are no mandatory annual distribution requirements, and you may continue contributing to your Roth IRA beyond age 70 1/2. Eligibility depends on income.

Roth IRA
Minimum to Open: $250

Contribution Deadline: April 15th of this year for previous tax year.
Tax Advantages
Contributions: Non-Deductible and subject to restrictions.

Earnings: Potentially Tax-free (earnings grow free of federal income tax).

Withdrawals:
- Tax-free (withdrawal of original contribution).
- Potentially tax-free (withdrawal of earnings if part of a qualified withdrawal).
Contributions
Who is Eligible:
- No age restrictions
- Eligibility phase out begins at modified Adjusted Gross Income (AGI) of $150,000 for married taxpayers filing jointly, and at modified AGI of $95,000 for single taxpayers.

Annual Contribution Amounts: - To determine your allowable contribution amount, please see chart below.
  For 2013 & 2014
Individuals under age 50 $5,500
Individuals age 50 and older $6,500

-OR-

100% of your taxable income
(which ever is less)

- Contributions are made on an after-tax basis, and can be made even if you contribute to a traditional IRA, SEP-IRA, or other employer-sponsored retirement program.
Withdrawals
Penalty-Free: Withdrawal of contributions at any age, or earnings after age 59 1/2 AND after account has been opened five years.

Penalty: Withdrawal of earnings before age 59 1/2 OR before your account has been open at least five years.

Exceptions to Penalty:
Before 5-year holding
period ends, subject to tax though penalties are waived if you are over 59 1/2 AND funds are withdrawn for:
After 5-year holding period ends, taxes and penalties are waived if you are over 59 1/2 OR funds are withdrawn for:
Higher education expenses for you or family members. Expenses include tuition, fees, books, supplies and room and board (must be enrolled at least part time).
First-time home purchase expenses (up to $10,000 lifetime limit) to buy, build or rebuild a first home for you, your parents, children or grandchildren. You must not have owned a home within the past two years.
Death or disability
Certain medical expenses including qualifying health insurance costs for certain unemployed individuals and unreimbursed expenses exceeding 7.5% of AGI.
Withdrawals made in equal installments over the account holder's life expectancy.
Five Year Holding Periods: There is a single five-year holding period when determining whether earnings can be withdrawn tax-free as part of a qualified distribution from a Roth contributory account. This period begins January 1 of the year of the first contribution to any Roth contributory account.

FDIC Web Site

HUD Web Site