A Roth IRA (Individual Retirement Account) is one of the most popular ways to save for retirement, featuring:

  • tax-free distributions if withdrawn after age 59½ and the account has been open five years or more
  • contributions (not earnings) can be withdrawn tax and penalty-free at any time
  • $1 million exclusion from bankruptcy

Unlike a Traditional IRA, Roth IRA contributions are not tax-deductible.

​Eligibility Requirements

You can contribute at any age as long as your Modified Adjusted Gross Income (MAGI) meets the following limitations (for 2016):

  • full contribution if MAGI is less than
    $117,000 (single) or $184,000 (joint)
  • partial contribution if MAGI is less than
    $132,000 (single) or $194,000 (joint)

​Investment Options

You have various options for investing in a Roth IRA:

  • mutual funds
  • stocks
  • bonds
  • annuities

​​Contribution Limits

The maximum annual contribution to a Roth IRA is the lesser of $5,500 for tax year 2016 or 100% of compensation. For those individuals who are 50 or older at the end of the taxable year, an additional catch-up contribution of $1,000 may be made.

Contributions aren't tax deductible and are made with
after-tax dollars.


You can withdraw contributions at any time free of tax and penalty. Earnings are income tax free if you've held the account for over five years and you are 59 1/2 or older.

You may be charged a 10% IRS early withdrawal fee if you withdraw earnings before the age of 59½, with the following exceptions:

  • disability
  • qualified first-time home purchase ($10,000 lifetime limit)
  • qualified higher-education expenses
  • qualified military reservist
  • medical expenses in excess of 7.5% of Adjusted Gross Income (AGI)
  • health insurance premiums if unemployed for 12 consecutive weeks
  • substantially equal payments made over life expectancy
  • death

Contact one of our Frost Wealth Advisors by calling
(888) 268-9202 for more details.