Resolve Debt

When it comes to the Roth IRA eligibility, the rules and regulations surrounding it seem to never end.  I swear you could read the IRS website and still be able to read for a few hours after spending an entire day there.  And I’m just talking about the rules surrounding Roth IRA’s.  This has nothing to do with the remainder of the tax code!  To that end, figuring out the Roth IRA eligibility requirements is an important part of figuring out how it fits into

your retirement planning scheme.

When it comes to eligibility, the number one thing to consider is your income level.  Actually, to be more specific, the modified adjusted gross income as seen on your tax form every spring.  This number (or MAGI for short) is what drives who can and can’t contribute to a Roth IRA.  Of course it depends on the way you file as well.  Single taxpayers have lower limits that married couples filing jointly.  And for those that file married separately, the income levels are very stringent.  These should b

e taken into consideration if you are considering adding a Roth IRA to your retirem

ent repertoire.

Another key eligibility requirement is your age.  After the age of 70.5 you need to start withdrawing funds from your Roth so it would make little sense to add at that point!  The Roth IRA is targeted specifically towards younger people who are looking to have a tax free option when they reach retirement for withdrawing funds.  Given that the money that you put in has already been taxed it is important to note that you would have to assume that you will be in a higher marginal tax rate in retirement than you are currently under.  When one looks at the historic tax rates in this country it isn’t a stretch to assume they will be moving higher given that they are at historical low levels currently.