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Roth IRA
The Roth IRA has been a popular investment since Congress added it in 1997 as an additional retirement-savings choice. Contributions to a Roth IRA are never tax-deductible, and interest accrues tax-free. If it has been five years since the account was established, and the investor is at least 59½, then withdrawals from a Roth IRA are generally tax-free.
Enactment of the federal Economic Growth and Tax Relief Reconciliation Act increased the maximum annual contribution to Roth IRAs:
| Year |
Amount |
| 2005 - 2007 |
$4,000 |
| 2008 and beyond |
$5,000 |
Those age 50 or older can deposit an additional $500 a year in "catch-up" contributions. Starting in 2006, this catch-up amount increases to $1,000 a year. Unlike the Traditional IRA, the Roth IRA allows the investor to contribute beyond age 70½ (some income limits apply). Contributions are based on earned income and can vary. Consult your tax adviser for more information.
Visit your Johnson Bank representative or call today to learn if an IRA is the best investment for you.
Use our Roth vs. Traditional IRA Calculator to compare the benefits of each type of IRA.
Financial Information Center Articles:
Retirement Planning Choices
Traditional IRA
Roth IRA
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