Tax-free growth potential
- Use the IRA Selector tool to see if you qualify for a Traditional or a Roth IRA
- Contribute on an after-tax basis and make qualified withdrawals at any time
- Automate your retirement investing with Core Portfolios (low $500 minimum)
- Enjoy fast, easy withdrawals at age 59½ with free cash management features3
- Options, futures, and limited margin available in Roth IRA
Why open a Roth IRA?
Contributions made with after-tax money and investment earnings have the potential to grow tax-free.
Compare investment accounts to see if a Roth IRA account is right for you.
Anyone with earned income that doesn't exceed income limits of $137,000 in 2019 ($139,000 in 2020) for single filers and $203,000 in 2019 ($206,000 in 2020) for joint filers is eligible for a Roth IRA
If 5 years have passed since the tax year of your first Roth IRA contribution and you meet certain criteria such as being 59 ½ years old, then you have met the requirements for a qualified distribution.
Added flexibility with accessing money
While these accounts are not as flexible as savings accounts, you can still withdraw money you specifically contribute at any time for any reason. Certain exceptions exist to avoid early withdrawal tax penalties on the earnings in your account.
No required minimum distributions (RMDs)
No RMDs beginning at age 70½ (72 for anyone born after 6/30/1949) for account holder.
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What are the eligibility requirements for Roth IRA?
- Must be 18 years of age or older with earned income
- Must have MAGI (Modified Adjusted Gross Income) under certain thresholds (see ‘Single Filers’ or ‘Joint Filers’ for additional information). If an investor exceeds the income limitations for a Roth IRA, they can consider contributing to a Traditional IRA. Contributions will not be tax-deductible; however, an investor will still benefit from the potential of tax-deferred growth. Additionally, Traditional IRA contributions may be converted to a Roth IRA at any time.
- To apply online, you must be a U.S. citizen or resident
- Roth IRAs must be established by the tax filing deadline (without extensions) for the tax year to which your qualifying contribution(s) will apply. This date is generally April 15 of each year. IRA Notice 2020-18 Relief for Taxpayers extended the IRA contribution deadline from April 15 to July 15, 2020. Applications postmarked by this date will be accepted.
- If an investor’s MAGI is less than $122,00 in 2019 ($124,000 in 2020), they may be eligible to make a full contribution. If their MAGI is between $122,000-$137,000 in 2019 ($124,000-$139,000 in 2020), they may be eligible to make a partial contribution. An investor is not eligible to make a contribution if their MAGI is more than $137,000 in 2019 ($139,000 in 2020).
- If a couple’s combined MAGI is less than $193,000 in 2019 ($196,000 in 2020), they may be eligible to make a full contribution. If their combined MAGI is between $193,000-$203,000 in 2019 ($196,000-$206,000 in 2020), a couple may be eligible to make a partial contribution. They are not eligible to make a contribution if MAGI is more than $203,000 in 2019 ($206,000 in 2020).
Modified adjusted gross income (MAGI) is used to determine whether a private individual qualifies for certain tax deductions. Most notably, it is used to determine how much of an individual's IRA contribution is deductible and whether an individual is eligible for premium tax credits.
What are the Roth IRA contribution limits and deadlines?
The amount an investor can contribute to a Roth IRA depends on various factors, such as Modified Adjusted Growth Income (MAGI) and tax filing status. View Roth IRA Contribution Limits and Deadlines to learn more.
How can an investor contribute to an IRA?
An investor can contribute to an IRA account by transferring funds online from a bank or brokerage account, sending a check, or completing a wire transfer. For more information about ways to make a deposit to an account, see the Help topic, Contribute to an IRA account.
An investor is allowed to contribute 100% of earned income up to the annual contribution limit. View IRA Contribution Limits and Deadlines to learn more.
What is a Roth IRA conversion and how can it be requested?
A Roth IRA conversion is the process of moving assets from a Traditional, Rollover, SEP, or SIMPLE IRA to a Roth IRA. The account owner can convert all or a portion of their IRA. If the account owner is converting a SIMPLE IRA, the account must have been opened for at least two years to be eligible. The deadline to complete a Roth IRA conversion is December 31 of each year. Please note: The recharacterization of Roth Conversions is no longer permitted due to the Tax Cut and Jobs Act. Read more if you are thinking about a Roth IRA conversion. For questions specific to your situation, please speak to your tax advisor. A Roth IRA conversion can be requested by using the online Roth IRA Conversion Request Form.
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