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Roth IRA

Roth IRA. Attilio Leonardi P1. Definition. A n individual retirement account allowing a person to set aside after-tax income up to a specified amount each year. Both earnings on the account and withdrawals after age 59½ are tax-free. Limits.

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Roth IRA

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  1. Roth IRA Attilio Leonardi P1

  2. Definition • An individual retirement account allowing a person to set aside after-tax income up to a specified amount each year. Both earnings on the account and withdrawals after age 59½ are tax-free.

  3. Limits • You can not take out the money tax free until you are age 59.5 year old.

  4. TYPICAL investor • The typical investor would be a conservative investor. • It is a long term investment

  5. How do you make Money? • You make the money on interest. • The equation is • R= Interest rate divided by compounds per year

  6. Economic climate • This is good as long as the investor can put in a specific amount of money every month. • So as long as the economic climate is stable the Roth IRA will be fine.

  7. 2 Places to get ROTH IRAs • You can get it form a brokerage firm like Schwab or TD Ameritrade Or • A mutual fund like Fidelity or Vanguard

  8. Money needed to get started • Earned income must be equal to or greater than your annual contributions. • Maximum Income: For tax year 2013: May not be eligible if your income is over $127,000 for single filers and $188,000 for joint filers.

  9. Risks • Long-term investment • Penalties if withdrawn before age 59.5 • Exceptions… • Death • Disability • First time house buying up to $10,000

  10. Simple Interest vs. ROTH IRA

  11. Works Cited http://individual.troweprice.com/public/Retail/Retirement/IRA/Roth-IRA https://www.fidelity.com/retirement-ira/ira/roth-ira http://www.rothira.com/account-options

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