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Roth IRA Eligibility

There are specific requirements for Roth IRAs. See if you qualify.

The Roth IRA is a fantastic retirement investment option that if used correctly can result in a tax-free retirement. However, not all individuals may qualify for a Roth IRA. Use the following as a guide to discover whether or not you can use a Roth.

Roth IRA Eligibility Requirements

There are a set of restrictions the Internal Revenue Service sets up that limits who can use a Roth IRA. There are different sets of rules for every retirement account (Roth IRA, Traditional IRA, 401k, etc.) and it can be easy to get the rules confused.

Roth IRA Income Eligibility

To utilize a Roth IRA your income must be under a specific level set by the IRS. Which level applies to you depends on your marital status. Your income must also be from work you performed rather than investment or rental income. The specific limits below are based on modified adjusted gross income.

Here are the basic guidelines for 2014 Roth Income Limits:

  • Single or head of household: you must earn less than $114,000 to fully contribute to a Roth IRA
  • Married filing jointly or a qualified widow(er): you must earn less than $181,000 to fully contribute to a Roth IRA
  • Married filing separately: you must earn less than $10,000 to fully contribute to a Roth IRA. (Note: Married filing separately can use the limits for single people if they have not lived with their spouse in the past year).

Read on to learn more about Roth IRA Income Eligibility.

Roth IRA Contribution Eligibility

Anyone with earned income that falls under the above guidelines can use a Roth IRA to save for retirement. How much you can save is dependent upon your age.

If you under the age of 50 years old you can contribute $5,500 toward retirement in a Roth IRA. If you are married each individual can set aside $5,500 toward their retirement, even if only one partner works (learn more about opening a spousal Roth IRA). The contribution limit is a total limit across any number of Roth accounts rather than per account.

If you are age 50 or older the same $5,500 contribution limit applies. However, you are also allowed to contribute an additional $1,000 as a "catch up" contribution toward retirement, for a total of a $6,500 contribution.

Read on to learn more about Roth IRA contribution limits.

Thinking About Opening an IRA?

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Important Roth Information

Each year, the IRS updates the rules for Roth IRA. Here are all the details for 2013 & 2014: