Roth IRA

A Roth Individual Retirement Account (Roth IRA) is an IRA that allows your investment earnings to grow tax free.1 Anyone with a Modified Adjusted Gross Income (MAGI) under a certain limit (refer to chart below) may open a Roth IRA.

The way it works is that you make after-tax contributions to your Roth IRA. In turn, you will not have to pay any IRS penalties or income taxes on the investment earnings when you make a qualified withdrawal. As defined by the IRS, a qualified withdrawal is one you make from a Roth IRA that was opened and first funded at least five years ago when you also meet one of the following conditions:

  • You are 59½ or older
  • The money is used for a first time home purchase (as defined by the IRS with a $10,000 lifetime limit)
  • The withdrawal is due to death
  • The withdrawal is due to disability (as defined by the IRS)

Another feature of the Roth IRA is that withdrawal of earnings made within the first five years will be IRS penalty free (but not tax free) when used for higher education expenses. A final benefit of the Roth IRA is, unlike a Traditional IRA, you do not have to start making withdrawals when you turn 70½.

Roth IRA MAGI Phase-Out Ranges for Contribution

Tax Year Single
Married
(filing jointly)

Married
(filing separate returns)
Full 
Contribution
Up To
Partial 
Contribution
Under
Full 
Contribution
Up To
Partial 
Contribution Under
Full 
Contribution
Up To
Partial 
Contribution
Under
2011
$107,000
$122,000
$169,000
$179,000
$0
$10,000
2012
$110,000
$125,000
$173,000
$183,000
$0
$10,000

Roth IRA Contribution Limits2

 
2011
2012
Roth
$5,000
$5,000
Catch-up Contribution (age 50 or older in the contribution year)
$1,000
$1,000
Total Contribution Limit (age 50 or older)
$6,000
$6,000
 
 
Try our new Chase
Retirement Calculator!

Calculate your current situation and explore your options – in a few simple steps.

Use the calculator

Retirement Calculator
 


Take Action
We can help you re-engage in your retirement strategy. Let us know when you'd like to meet with a Financial Advisor.

Get started
Electronic Delivery
Sign up Opens new window to receive your brokerage account prospectuses, annual reports and proxy statements electronically.