With a Roth IRA (Individual Retirement Account), you save and grow your retirement investments tax-deferred, and pay no tax on the withdrawals after you retire. And there are no age requirements for withdrawals and contributions.  But unlike a Traditional IRA, you will pay income tax on your annual contribution.   

Key Features

  • No age limitation. You can make contributions throughout your life as long as you have earned income below certain IRS-defined limits. 
  • After-tax contributions. You pay regular income tax on the money you put in. 
  • Tax-free withdrawals. You pay no federal income tax when you take qualified withdrawals and have had the account for five years. If you are under 59½, you will have to pay a 10% early withdrawal penalty on the earnings unless you qualify for an IRS exception. 
  • Penalty-free withdrawals. You can withdraw contributions (not earnings) tax- and penalty-free before age 59½.
  • Maximum contributions. In tax year 2014, the most you can contribute yearly is $5,500; $6,500 if you are age 50 or older. 
  • Leave it as an inheritance. You never have to withdraw your money. You can even leave it to your heirs for an income tax-free inheritance (there may be estate taxes).
  • First-time homebuyer’s exemption. After five years, first time homebuyers can withdraw up to $10,000 tax-free and penalty-free for qualified expenses.   

Products

This material is provided for general and educational purposes only; it is not intended to provide legal, tax or investment advice.  All investments are subject to risk.  We recommend that you consult an independent legal or financial advisor for specific advice about your individual situation.

The information herein is not intended to be used, and cannot be used by any taxpayer, for the purpose of avoiding tax penalties. Taxpayers should seek advice based on their own particular circumstances from an independent tax advisor.

Securities offered through Voya Financial Advisors, Inc. member SIPC.

Neither Voya nor its affiliated companies provide tax or legal advice. Please consult with your tax and legal advisors regarding your individual situation.