roth iras n.
Download
Skip this Video
Loading SlideShow in 5 Seconds..
ROTH IRAs PowerPoint Presentation
Download Presentation
ROTH IRAs

Loading in 2 Seconds...

play fullscreen
1 / 14

ROTH IRAs - PowerPoint PPT Presentation


  • 110 Views
  • Uploaded on

ROTH IRAs. PLEASE DO NOW …. In your notebooks, please answer the following questions: What are the advantages of a traditional IRA? Is it better to be taxed on IRA distributions or is it better to be taxed on your IRA contributions? Please explain. TODAY’s GOALS. What is a Roth IRA?

loader
I am the owner, or an agent authorized to act on behalf of the owner, of the copyrighted work described.
capcha
Download Presentation

PowerPoint Slideshow about 'ROTH IRAs' - brewster-neumann


An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -
Presentation Transcript
slide2

PLEASE DO NOW…

  • In your notebooks, please answer the following questions:
  • What are the advantages of a traditional IRA?
  • Is it better to be taxed on IRA distributions or is it better to be taxed on your IRA contributions? Please explain.
slide3

TODAY’s GOALS

  • What is a Roth IRA?
  • Who is eligible to establish a Roth IRA?
  • How can we contribute to a Roth IRA?
  • Distributions from a Roth IRA.
investment management standard s
INVESTMENT MANAGEMENT STANDARD(S)

Achievement Standard: Evaluate savings and investment options to meet short and long-term goals.

Achievement Standard: Evaluate services provided by financial deposit institutions to transfer funds.

slide6

WHAT IS A ROTH IRA?

  • A retirement account where contributions are NEVER tax-deductible (they are taxed!!!) and earnings grow on a tax-free basis.
  • An excellent supplement to an individual’s retirement income.
  • In general, assets in the Roth IRA are NOT taxed when they are withdrawn.

ROTH IRA Video

slide7

WHO IS ELIGIBLE TO ESTABLISH A ROTH IRA?

  • Any individual, regardless of age, who has taxable compensation for the year.
  • Any individual, regardless of age, who has self-employment income for the year.
  • To make a contribution, the individual must have a modified adjusted gross income (MAGI) that is less than a certain amount.
slide8

HOW CAN WE CONTRIBUTE TO A ROTH IRA?

  • Make a contribution to your Roth IRA account.
  • Make a contribution to your spouse’s Roth IRA account.
  • Transfers.
  • Rollover contributions.
slide9

DISTRIBUTIONS FROM A ROTH IRA

  • In general, distributions from a Roth IRA must NOT occur before age 59½.
  • In general, distributions that occur before 59½ will be charged a 10% early distribution penalty.
  • Qualified distributions from a Roth IRA are ALWAYS tax-free.
  • Non-qualified distributions from a Roth IRA may be taxed.
  • There are some exceptions to the 10% penalty rule.
  • A Roth IRA owner does NOT have to take required minimum distributions (RMDs) the year he or she reaches age 70½.
slide10

WHAT IS THE DIFFERENCE BETWEEN A TRADITIONAL AND ROTH IRA???

  • Traditional IRA: taxes are paid on the back end, or when you take distributions. Your original investment, plus all earnings are taxed!
  • Roth IRA: taxes are paid on the front end, or when you make contributions.Your original investment is taxed, your earnings are not taxed!
slide12

LET’s PRACTICE…

Jack, age 61, takes a $6,000 distribution from his Roth IRA. His income tax bracket is 35%. How much will he be taxed on the distribution?

Solution:

Taxes on Roth IRA QUALIFIED Distributions =

$0.00

slide13

A LOOK AHEAD…

Understanding the P/E Ratio