TD Ameritrade

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Call us: 800-454-9272

175+ Branches Nationwide

Is a Roth IRA right for you?

A Roth IRA is an individual retirement account that offers the opportunity for tax-free income in retirement. Annual contributions are taxed upfront and all earnings are federal tax-free when they are distributed according to IRS rules. This is much different than a Traditional IRA, which taxes withdrawals. Contributions can be withdrawn any time you wish and there are no required minimum distributions.  If you are in a lower tax bracket today than you will be during retirement, a Roth IRA may be a smart choice.

Open a Roth IRA

Benefits of a Roth IRA

  • Withdrawals of earnings are free from federal income tax, provided the Roth IRA has been in existence for five years and you are at least 59½.
  • Contributions can be withdrawn anytime without federal income taxes or penalties.
  • RMDs (Required Minimum Distribution) are not required.
  • Distributions for your beneficiaries are tax-free.

Why open a TD Ameritrade Roth IRA?

  • Breadth of Investment Choices - Including commission-free ETFs, no-transaction-fee mutual funds1, fixed income products, and much more.
  • Empowering Education - We offer exclusive videos, useful tools, and webcasts to help you create a personalized retirement plan.
  • Smart Tools – Plan and evaluate your retirement strategy with helpful tools like the IRA Selection Tool and Retirement Calculator.
  • Fair and Objective Research - Take control with objective third-party research provided by Morningstar Investment Management, CFRA (formerly S&P Capital IQ), and Market Edge

Roth IRA Rules

Eligibility

To contribute, you must earn income. There are no age limits.

Income Limits

2020

If you are single, $124,000 or less

If you file jointly, $196,000 or less

 

2021

If you are single, $125,000 or less

If you file jointly, $198,000 or less

Contributions

Are not tax deductible

Maximum Contributions

2020 and 2021

Up to age 50: $6,000

Age 50+: $7,000

Non-income-earning spouse: $6,000 (into a separate IRA)

Earnings

Grow tax-free

Distributions

Free from federal income tax when:

- The Roth IRA account has been open for at least 5 years

-You are age 59 1/2 or older

Required Minimum Distributions

Are never required

Early Withdrawals

Before age 59 1/2 are subject to a 10% penalty in addition to any ordinary income tax that may be due

  • Roth IRA vs. Traditional IRA

     

    Need help deciding between a Roth IRA and a Traditional IRA? Try our IRA Selection Tool or view a comparison chart to find out which IRA is right for you.

  • Considering a Roth IRA conversion?

    Consider taking advantage of every savings strategy you can. Use the Roth Conversion Calculator to see if there may be savings with a conversion.

  • Keep your old 401k working for you

     

    Have you changed jobs or planning to retire? Learn about the benefits of rolling over your old 401k to a TD Ameritrade IRA.

Get in touch Call or visit a branch

Call us: 800-454-9272

175+ Branches Nationwide

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Before investing in any mutual fund or ETF, carefully consider the fund's objectives, risks, charges and expense. A prospectus, obtained by calling 800-669-3900, contains this and other important information about an investment company. Read carefully before investing.

1No-Transaction-Fee (NTF) mutual funds are no-load mutual funds for which TD Ameritrade does not charge a transaction fee. NTFs, as well as other funds, have other continuing fees and expenses described in the fund’s prospectus. TD Ameritrade receives remuneration from fund companies for record-keeping, shareholder and other administrative services. The amount of remuneration is based in part on the amount of investments in such funds by TD Ameritrade clients. Almost all funds held 180 days or less will be subject to a short-term redemption fee of $49.99. This fee is in addition to any applicable transaction fees or fees described in the fund's prospectus.

Taxes related to TD Ameritrade offers are your responsibility. All Promotional items and cash received during the calendar year will be included on your consolidated Form 1099. Please consult a legal or tax advisor for the most recent changes to the U.S. tax code and for rollover eligibility rules.

Market volatility, volume and system availability may delay account access and trade executions.

The 15 minute time frame applies to normal situations and may not reflect the time needed for all users to read all disclosure documents, which should be done. Account funding must be completed in order for trading to begin.

TD Ameritrade does not provide tax advice. We suggest you consult with a tax-planning professional with regard to your personal circumstances.

TD Ameritrade is not responsible for third-party information or services. Names and logos displayed are the property of their respective owners.

All investments involve risk, including loss of principal. Past performance does not guarantee future results. There is no assurance that the investment process will consistently lead to successful investing. Asset allocation and diversification do not eliminate the risk of experiencing investment losses.

Mutual funds are subject to market, exchange rate, political, credit, interest rate and prepayment risks, which vary depending on the type of mutual fund.

Before deciding whether to retain assets in a 401(k) or roll over to an IRA an investor should consider various factors including, but not limited to, investment options, fees and expenses, services, withdrawal penalties, protection from creditors and legal judgments, required minimum distributions and possession of employer stock. View the FINRA Investor Alert for additional information. You may roll over assets from a former employer's retirement plan to an existing Traditional IRA or open a new, separate Rollover IRA. The assets you roll over to an existing Traditional IRA can later be moved into an employer-sponsored plan. However, the after-tax (non-deductible) contributions you make to your Traditional IRA cannot be rolled over to an employer-sponsored plan. Always consult a tax advisor to learn how a financial decision will impact your individual retirement planning.

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