Michael Milazzo photo

Michael A. Milazzo, CLU, ChFC

Registered Principal

 

The Meridian Financial Company

3350 Club Villas Dr SE, Unit #1303

Southport, NC 28461

 

Phone:  631-979-4223

Fax:      910-854-0002

 

Email: meridian@ae.cadaretgrant.com

Website: www.merfinco.com

May/June 2024

Roth IRA: A Good Fit for Your Goals?

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Contributions to a Roth IRA can be withdrawn at any time, but earnings distributed before age 59 1/2 may be subject to a 10% penalty and income tax unless you meet an exception.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.


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Securities and Advisory Services offered through Cadaret, Grant & Co, Inc, a Registered Investment Advisor and Member FINRA/SIPC. The Meridian Financial Company and Cadaret, Grant & Co., Inc. are separate entities. I am registered to sell Securities in the following States: NY, NJ, PA, NC, FL, ID.
The Meridian Financial Company 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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