How to Get Started with a Roth IRA

Contributing to a Roth IRA may help you reach your retirement goals. Setting up a Roth IRA is straightforward from eligibility right through to actually setting up your account.

Instructions

Difficulty: Moderately Easy

1. The very first thing to look at is: Are you eligible to contribute to a Roth IRA?
   
   You may meet the requirements to set up Roth IRA. The eligibility requirements and tax-free benefits of an IRA are straightforward and worth knowing about.
   
   Your eligibility is based on your Adjusted Gross Income, and whether you file your tax return as a single person or whether you file jointly. Your age enters into the eligibility requirements only by setting limits on your contributions. For example, in 2007, the contribution limits are $4,000 if you are under age 50 and $5,000 if age 50 and over. However, unlike a traditional IRA, , you are still eligible to contribute to a Roth IRA if you are age 70 1/2 or older and you have earned income.
   
   Your Adjusted Gross Income or AGI determines your eligibility to contribute to a Roth IRA. The AGI ceiling is linked to whether you file singly or jointly.
2. Filing a single tax return? You are eligible to make a full Roth contribution if you AGI is less than $99,000.If your AGI is between $99,000 and $114,000, you can put a portion (with a gradual decline) of your contribution into a Roth IRA and the remainder into a traditional IRA account.
3. Filing jointly? Your AGI would need to be less than $156,000 for 2007 . You can make a partial contribution as a joint filer if your AGI is less than $166,000 for 2007.
4. With a Roth IRA, your earnings grow tax-free. Although your contributions to a Roth IRA,are not tax-deductible, the contributions can be withdrawn at any time under certain conditions without penalty or tax. Earnings are free from federal tax if they are withdrawn after age 59 and the account has been open for more tan 5 years.
5. Many people make contributions to their Roth IRA to help reach their retirement goals. Consider opening a Roth IRA and see your savings grow tax free whie you enjoy the peace of mind of knowing that you are preparing for your future.
   
   Where can you start a Roth IRA?
   Find the source that is best for you.
   
   1)Banks, savings and loans, and credit unions. This may be the way to go, especially if they will start you off with a comparatively small account and if they no fees or charge. They can set you up with a larger account, too, but they may not offer the range of investment options that you are looking for.
6. Many people make contributions to their Roth IRA to help reach their retirement goals. Consider opening a Roth IRA and see your savings grow tax free whie you enjoy the peace of mind of knowing that you are preparing for your future.
   
   Where can you start a Roth IRA?
   Find the source that is best for you.
   
   1)Banks, savings and loans, and credit unions. This may be the way to go, especially if they will start you off with a comparatively small account and if they no fees or charge. They can set you up with a larger account, too, but they may not offer the range of investment options that you are looking for.
7. 2)Mutual Fund Companies can offer you a wide selection of investment options and even enable you to invest your money in different types of funds. This may be your best choice because you may be able to shift from one IRA fund to another as your goals change.
8. 3)Brokerage Firms offer IRA accounts. You can develop your own portfolio by making particular investments in your IRA. Here you may be able to invest in mutual funds and stocks.
9. Wherever you go to set up your Roth IRA, be sure to ask about all fees. Get the details on startup fees, maintenance fees, fees for changing those investments or withdrawing your money or to take that money to another IRA provider.
   
   Made your choice?
   Getting started with require filling out some forms. you will need to designate beneficiaries and, here, you may want to consult with an estate planning professional to make the best decision regarding beneficiaries.
10. Once you have set up your IRA account, keep records so that you can change your investments. Set up a file in a safe place. You will need these for tax purposes or when you want to make changes to your investment.
    
    Contributing to a Roth IRA may help you reach your retirement goals. If you are eligible, setting up a Roth IRA is well worth looking at to help you meet your financial goals and it is relatively easy to set up your account.