Open a Roth IRA Today!
America First's Roth IRA may be for you if you'd prefer to pay taxes on your retirement now instead of later. Your options include opening a Roth IRA Accumulator, with no minimum deposit required; a Roth IRA Certificate with a $500 minimum deposit; and/or a Roth Dedicated Savings Account with no minimum deposit and an automatic transfer of at least $10 per month.
Benefits of Roth IRAs:
- Accrue Tax-free earnings if you meet certain conditions
- Deposit money after taxes
- Withdraw the entire amount tax-free after five years if:
- You are 59½ or older, or
- You are a first-time home buyer, or
- You are disabled, or
- You are a beneficiary of the deceased owner.
The following chart demonstrates the additional benefits of a Roth IRA:
Total available for tax-free withdrawals after age 59½:
$12,672
$31,292
$58,648
$98,845
Total available after tax if tax rate becomes one of the following at retirement:
$13,849
$35,162
$63,242
$105,182
$12,446
$30,249
$55,763
$92,401
$12,122
$30,391
$54,036
$89,451
$11,581
$27,910
$51,157
$84,533
$11,191
$26,795
$49,084
$80,992
| Years in IRA | 5 | 10 | 15 | 20 |
|---|---|---|---|---|
|
“
Roth IRA |
“
Total available for tax-free withdrawals after age 59½: |
|
|
|
|
|
“
$12,672 |
“
$31,292 |
“
$58,648 |
“
$98,845 |
|
“
Traditional IRA |
“
Total available after tax if tax rate becomes one of the following at retirement: |
|
|
|
|
“
If tax rate drops to 15% |
“
$13,849 |
“
$35,162 |
“
$63,242 |
“
$105,182 |
|
“
If tax rate stays at 28% |
“
$12,446 |
“
$30,249 |
“
$55,763 |
“
$92,401 |
|
“
If tax rate rises to 31% |
“
$12,122 |
“
$30,391 |
“
$54,036 |
“
$89,451 |
|
“
If tax rate rises to 36% |
“
$11,581 |
“
$27,910 |
“
$51,157 |
“
$84,533 |
|
“
If tax rate rises to 39.6% |
“
$11,191 |
“
$26,795 |
“
$49,084 |
“
$80,992 |
* Based on contributions of $2,000 at the beginning of the year for 5, 10, 15, or 20 years with earnings compounded annually. Assumes proceeds are withdrawn without penalty at year-end.
Traditional IRA figures assume you are in the 28% tax bracket when the contributions are made and shows how much is available after tax if your tax rate drops, holds steady, or rises. Traditional IRA balances assume the annual tax savings were reinvested in a taxable account and combined with the IRA balance upon withdrawal.
Source: Deloitte and Touche
Comparing Traditional & Roth IRAs
There are no age limits.
There are no age limits.
You must have earned income. There are no maximum income limits.
You must have earned income. In 2024, the maximum amount you can contribute phases out when your household income is between $146,000 - $161,000 if you are single and $230,000 - $240,000 if you file jointly.
- For 2024, up to $7,000. If you are 50 or older by the end of the year, the limit is raised to $8,000.
- For 2023, up to $6,500. If you are 50 or older by the end of the year, the limit is raised to $7,500.
- For 2024, up to $7,000. If you are 50 or older by the end of the year, the limit is raised to $8,000.
- For 2023, up to $6,500. If you are 50 or older by the end of the year, the limit is raised to $7,500.
May be tax-deductible.
Are not tax-deductible.
Grow tax-deferred.
Are not tax-deductible.
Are penalty-free and taxed as ordinary income when taken after age 59 1/2 (unless you made nondeductible contributions.)
Are not taxed as long as the Roth IRA has been open for at least five years and you are 59 1/2 or older.
Must start taking them the year you attain the age of 73.
Are not required.
Withdrawals before reaching the age of 59 1/2 are subject to a 10% IRS penalty in addition to any ordinary income tax.
Withdrawals of your contribution amounts are allowed at any time without tax or penalty. However, you may be subject to tax and a 10% IRS penalty for withdrawing your earnigns before you reach the age of 59 1/2.
| Traditional IRA | Roth IRA | |
|---|---|---|
|
“
Contribution Age Restriction |
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There are no age limits. |
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There are no age limits. |
|
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Income Requirement |
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You must have earned income. There are no maximum income limits. |
“
You must have earned income. In 2024, the maximum amount you can contribute phases out when your household income is between $146,000 - $161,000 if you are single and $230,000 - $240,000 if you file jointly. |
|
“
Contribution Limits |
“
|
“
|
|
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Tax-Deductibility for Contributions |
“
May be tax-deductible. |
“
Are not tax-deductible. |
|
“
Earnings |
“
Grow tax-deferred. |
“
Are not tax-deductible. |
|
“
Distributions |
“
Are penalty-free and taxed as ordinary income when taken after age 59 1/2 (unless you made nondeductible contributions.) |
“
Are not taxed as long as the Roth IRA has been open for at least five years and you are 59 1/2 or older. |
|
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Required Minimum Distributions |
“
Must start taking them the year you attain the age of 73. |
“
Are not required. |
|
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Early Withdrawals |
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Withdrawals before reaching the age of 59 1/2 are subject to a 10% IRS penalty in addition to any ordinary income tax. |
“
Withdrawals of your contribution amounts are allowed at any time without tax or penalty. However, you may be subject to tax and a 10% IRS penalty for withdrawing your earnigns before you reach the age of 59 1/2. |
Determine your Own Tax Schedule
A Roth IRA might be right for you.
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