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1021223-00006-00
Rogelio Gonzalez, CRPC®, CSRIC™
Financial Advisor, Prudential Advisors
Pacific Northwest Financial Group
7525 SE 24th Street, Suite 110
Mercer Island, WA 98040
Phone: 360-919-4271
May/June 2024
Roth IRA: A Good Fit for Your Goals?
Traditional and Roth individual retirement accounts are both good choices for retirement investing. A Roth IRA offers tax advantages when you’re ready to withdraw your money, while traditional IRA contributions are tax-deferred until you make withdrawals. Reviewing both IRA options can help you decide.
Roth Basics
Contributions to a Roth IRA are made with after-tax money. That means you won’t get a tax deduction for your contributions. However, the money in your account accumulates tax free. Withdrawals are also tax free, giving you a tax-free income stream in retirement. The maximum contribution to Roth and traditional IRAs in 2024 is $7,000, or $8,000 for people age 50 or older.No Required Distributions
Traditional IRAs require minimum distributions from your account after you reach age 73. A Roth IRA has no minimum distribution requirement — ever. If you don’t need the money in your account, you can allow it to keep growing tax free during your lifetime and then pass the Roth IRA tax free to your heirs.Income Limits
You cannot contribute to a Roth IRA if your modified adjusted gross income (MAGI) exceeds certain amounts. For 2024, the income limit for single and head-of-household filers to contribute the maximum amount is $146,000. Partial contributions are allowed until MAGI exceeds $161,000. Married joint filers can contribute the full amount if MAGI is $230,000 or below, with total phaseout at MAGI above $240,000.The Five-year Rule
Contributions to a Roth IRA can be withdrawn at any time, but earnings distributed before age 59 1/2 may be subject to a 10% penalty and income tax unless you meet an exception. After age 59 1/2, you can withdraw both contributions and earnings with no penalty once the account has been open for at least five tax years.How to Decide
Consider a Roth IRA if you expect to be in a higher tax bracket in retirement. Because you’ll pay taxes on the conversion, converting a traditional IRA to a Roth IRA generally should be undertaken when you have a dip in income. Your financial professional can help you make an informed decision.1056788-00003-00
Prudential Advisors is a brand name of The Prudential Insurance Company of America and its subsidiaries. Offering investment advisory services and programs through Pruco Securities, LLC (Pruco), under the marketing name Prudential Financial Planning Services (PFPS), pursuant to a separate client agreement. Offering insurance and securities products and services as a registered representative of Pruco, and an agent of issuing insurance companies. 1-800-778-2255. Prudential and its representatives do not give tax or legal advice. Please consult with your own advisors regarding your particular situation. Prudential, the Prudential logo, and the Rock Symbol are service marks of Prudential Financial Inc., and its related entities, registered in many jurisdictions worldwide. Pacific Northwest Financial Group and LTM Marketing Specialists LLC are unrelated companies. This publication was prepared for the publication’s provider by LTM Client Marketing, an unrelated third party. Articles are not written or produced by the named representative.
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