How Learning the Rules can Benefit in Increasing Your Roth IRA Potential

Retirement savings are a fantastic tax shelter, but to maximize those tax savings you have to understand the Roth IRA rules and requirements. Basically, the contributions you make to a traditional retirement plan are done on a pretax basis - employers match your contributions and those contributions are tax-deductible.
With a Roth IRA, the contributions aren’t deductible, but income earned and future withdrawals are tax free.
To learn more about Roth IRA and traditional IRA rules, read on for information that can help you amp up your savings and earnings.
Roth IRA Limitations
Roth IRA contributions are limited at $5000 per tax year. However, if you’re 51 or over, you can contribute up to $6000 to a Roth IRA. In 2009, those contribution limitations are expected to increase based on current inflation rates. They will go up in $500 increments.
Unfortunately, Roth IRA contributions are subject to eligibility limitations too. For example, a married couple that jointly earned between $150,000 and $160,000 or higher, or a single individual who earns $95,000 to $110,000 or higher can’t contribute to a Roth IRA. Instead, they must depend on a 401(k) Roth.
The 401(k) Roth Plan
If you are participating in an elective contribution plan […]

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