Roth IRA

Roth self-directed IRAs are one of the most beneficial retirement plans available.

All contributions are made after tax, but the earnings grow on a tax-free basis provided that certain requirements are met. Unlike traditional IRAs, contributions may be made after you reach the age of 70 ½, and there are no required minimum distributions at 70 ½. In most instances, the amounts you have contributed may be withdrawn at any age with no tax liability.

When you reach the age of 59 ½ years and the Roth account has been funded for at least five years, you can take tax-free withdrawals of both contributions and earnings. Roth IRAs are extremely flexible tools for all ages of investors. You are able to plan for retirement and are also able to withdraw funds without dire tax penalties.

 Roth IRA Eligibility and Roth IRA Income Limits
  • Individuals of all ages who have an income can own a Roth IRA.
  • Anyone with earned income which does not exceed the income limits is eligible to contribute to a Roth IRA.
  • As of 2010, the income limit for conversions is eliminated.

You can contribute to an Advanta self-directed Roth IRA if you have taxable income and your modified adjusted gross income is less than:

Married individuals filing jointly:

  • $191,000 for 2014

Single or head of household:

  • $129,000 for 2014

Married, filing separate returns:

  • $10,000 for 2014
Roth IRA Contribution Limits 2014
Up to age 50 $5,500
Catch-Up Contributions Provision Age 50+ $1,000
Total Contributions If Over Age 50+ $6,500
You can make contributions up to 100% of your compensation or a maximum of $5,500 ($6,500 if 50 and over).

Distributions from a Roth IRA

You may take distributions tax free if:

  • You are 59½ years of age AND have had a Roth IRA for at least five years.
  • You are disabled.
  • You are buying a home for the first time.

When you take withdrawals, the funds are distributed in the following order:

  • The first amount distributed is from annual contributions that have already been taxed. Remember, your Roth IRA contributions are made with post-tax dollars. There is no tax and no penalty when these dollars are withdrawn, even if you are within five years of establishing the account and under 59½ years of age.
  • After all the regular contributions have been distributed, any amounts that you converted from a traditional IRA are distributed. These dollars were taxed when they were converted. However, if these dollars are distributed when you are younger than 59½ and within five years of the conversion, they are subject to a 10 percent early-withdrawal penalty.
  • The earnings are distributed after conversion dollars. For earnings to be distributed tax-free, you must have had the Roth for at least five tax years and be age 59½.

Free to Choose

With a self-directed Roth IRA, you can control how your investments are allocated. Why let someone else determine which investments are right for you? You have a broad range of investments at your fingertips and will not be limited to stocks and bonds. Use the purchasing power of your self-directed Roth IRA that can help you save for retirement or increase your funds.

At Advanta IRA, we want you to have the freedom to explore the many possibilities of expanding your investments. Kindly visit our learning center to find out more about the fundamentals of self-directed plans and how to open an account. Call our office so we can personally address your questions about self-directed plans. We have regional offices in Fort Myers, Miami, Gainesville and Tampa, FL; Atlanta and Thomasville, GA; and Newton, MA. To find out more, visit our Contact Us page.