Introducing The Roth IRA

I will go on record as to say that the Roth IRA is the greatest thing since sliced bread. Here’s is some insight to my reasoning:

Roth IRA = Tax Free Money

Do you enjoy paying taxes? Do enjoy getting your pay stub each pay period and seeing how much you give to the IRS? Don’t you wish there was a way for you to beat the system and get tax free money? Well, it case you missed it-there is. It’s called the Roth IRA. Maybe you have heard about it. If you have, and you haven’t opened one yet then stop reading this and go do it. Then come back and learn how it works.

How Roth IRA Works

Most people will be eligible to take advantage of the Roth IRA, but if you make too much money you are excluded (Single/Head of Household phaseout begins at $101,000-$116,000, Married/Jointly phaseout begins $159,000-$169,000). For those than can take advantage, you are able to contribute $5,000 in 2008 per person (husband and wife can deposit $5,000 a piece). If you are over 50, you can deposit $6,000 per person. The money you contribute is after tax, so you do not get a tax deduction initially. But you will not pay any taxes on any money that comes out once you reach 59 1/2.

Other Things to Know About Roth IRA

There are some restrictions and other items you should know in regards to the Roth IRA:

· You must have earned income to be able to contribute (this does not include interest off investments or inheritances)

· You have until April 15th to make your contribution

· You can do a Roth IRA in conjunction with your 401k (There are limits on how much you can contribute in each one).

· Your contributions (what you put in) can be withdrawn at any time without penalty.

· The earnings must stay in for at least five tax years. After the five years and the owner reaching 59 1/2, dies, or is disabled, they earnings are able to be withdrawn tax free.

· First time homebuyers are allowed to withdraw up to $10,000 lifetime penalty free.

Securities offered through LPL Financial. Member FINRA/SIPC.