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May/June 2026
Roth IRA: A Good Fit for Your Goals?
Traditional and Roth individual retirement accounts are both solid options for retirement savings. A Roth IRA offers tax advantages when you're ready to withdraw your funds, while contributions to a traditional IRA are tax-deferred until you take distributions. Comparing both IRA options can help you make an informed decision.
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 grows tax free. Withdrawals are also tax free, providing you with a tax-free income stream in retirement. The maximum contribution to Roth and traditional IRAs in 2026 is $7,500, or $8,600 for people aged 50 or older.No Required Distributions
Traditional IRAs require minimum distributions from your account after you reach age 73. In contrast, a Roth IRA has no minimum distribution requirement—ever. If you don't need the money in your account, you can leave it untouched 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 limits. In 2026, the income cap for single and head-of-household filers to contribute the maximum amount is $168,000. Married joint filers can contribute the full amount if their MAGI is $252,000 or less.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Contributions to a Roth IRA can be withdrawn at any time, but earnings distributed before age 59-1/2 may be subject to a 10% penalty and income tax unless you meet an exception.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. Since you'll pay taxes on the conversion, it's usually best to do so when your income dips. Your financial professional can help you make an informed decision.CONTACT US
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Adan H. Diaz and Bryce McLeish offer products and services using the following business names: FRESCO Financial Advisers – insurance and financial services | Ameritas Investment Company, LLC (AIC), Member FINRA/SIPC – securities and investments | Ameritas Advisory Services (AAS) – investment advisory services. AIC and AAS are not affiliated with FRESCO Financial Advisers. The information you provide us is the basis for the recommendations we make to help you meet your unique financial goals and objectives. If you experience a change in your financial situation or investment objectives, or if you wish to modify or add any restrictions concerning the management of your account, please contact us. Products and services are limited to residents of states where the representative is registered. This is not an offer of securities in any jurisdiction, nor is it specifically directed to a resident of any jurisdiction. As with any security, request a prospectus from your representative. Read it carefully before you invest or send money. A representative will contact you to provide requested information. Representatives of AIC and AAS do not provide tax or legal advice. Please consult your tax advisor or attorney regarding your situation.
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