IRA stands for Individual Retirement Account. It is a kind of savings account that enables employees to save for their retirement and other financial goals. It also offers great tax benefits and advantages that facilitate easy and quick savings.

There are different types of IRAs, but the most common ones are the Traditional IRA, Nondeductible IRA, and the Roth IRA.

Roth IRA Distributions

What qualifies for a Roth IRA distribution? A qualified distribution must take place at least 5 years upon the establishment of the IRA. The IRA holder must also be at least 59 years old (+6 months) during the distribution, and the assets to be distributed shall be used to purchase, build, or rebuild the IRA holder’s home. For other distribution qualifications, get in touch with our expert advisors at Exemplify Financial Services, LLC.

IRA Beneficiaries

The choice to go for either a traditional IRA or Roth IRA depends on your current tax bracket and your anticipated tax bracket during retirement.

Anyone is eligible to apply for a Traditional IRA regardless of how much income one makes. However, the amount that you will be contributing will depend on how much you earn.

Nonetheless, any form of deduction, no matter how much, goes a long way, not only when it comes to tax deductions, but most especially when it comes to retirement savings.

As for the eligibility for a Roth IRA contributions, you will need to be earning only up to a certain level of income – typically, a household income that amounts to beyond $50,000 may no longer qualify for a Roth IRA.

Plus, when you file your household tax jointly, your (non-working) spouse can also open an IRA account (whether Traditional or Roth) for his or her own retirement savings.