by Voobie
Talking with Lisa yesterday I was amazed to learn that neither she, nor her husband, nor any of the other seven families in our child’s play group have opened a Roth account. You too?
Even A Caveman… Did you know investment gains within a Roth are tax free after age 59 1/2? Opening a Roth is as simple as opening a bank account. A Roth should really be the first investment vehicle you start.
Each year with a Roth you can place up to $6,000 in a TAX-FREE investment account ($5,000 if you’re under 50). No matter how much your investments make in this account, the gains are tax free … now and when you begin withdrawing the funds after age 59 1/2. If you own a brokerage account you should have another account earmarked for Roth. It works the same, only tax free. If you don’t have a broker account, open one at a discount broker (like Schwab, Fidelity or Scott Trade).
Some people are sharp enough to have after-tax investments generating over 8% annually. If you’re in this group, still consider a Roth. It makes the perfect college savings plan for that budding genius child of yours.
Do You Qualify for a Roth? You do if …
o you and / or your spouse have earned income
o you want tax free income when you retire (or over 59 ½)
o your modified household AGI is under $177,000 (2010)
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