A Roth IRA account is pretty much an entirely different story from a traditional IRA. There are many terms and conditions between those two that are not the exactly the same. With a Roth IRA, you can only contribute so much per year, which is based on the amount of compensation that you receive from your job or retirement income. You must have some type of income to be able to make contributions to your Roth account, but there is also a limit on how much you can make. For example, if you have an AGI (adjusted gross income) of more than $100,000 in most cases, you are not able to contribute to your IRA.
This might not make much sense, but the IRS makes these rules so it should be assumed that the reasons are good. If you do have a job, and you don’t make too much money, you can only contribute directly with a certain amount of money. In 2008, that amount was $5,000 for those under the age of 50, and $6,000 for those aged 50 and above. That means that out of your paychecks, you can only put that much money into your account each year. Also, the amount changes with every year, so you will need to consult a tax professional or financial planner to determine what the regulations are for each new year.
When it comes to opening a Roth IRA account, there is a lot that you will need to learn. You may use our Roth IRA calculator, but the best way to do this is to consult with a professional that works in accounting or financial services, because they can help you to choose which IRA is best for you, and help you to better understand the Roth IRA. This account is seen as one of the best accounts that you can have when you are involved in trading or investing in the stock market, when compared to other IRAs.
You should note that your contributions to the Roth IRA account are only direct contributions. When you have other investments that contribute money to that account, those don’t go against what you personally put in there out of your own salary. That’s actually one of the reasons that you can only contribute so much directly, because your other investments will grow the account for you. Roth IRAs are not all that complicated to understand, but you need to have them explained to you by a qualified professional that can help you set up a savings and investment plan that works for you.