How can you qualify for a Roth IRA?

Estimated reading time: 2 minutes(Last Updated On: April 13, 2021)

Navigating your financial future can be a daunting task, and most of us would instead not think about it if we didn’t have to. However, thinking about your retirement does not have to be hard or stressful.

A Roth IRA can take away some of the guesswork, but how can you contribute? Quest is here to help you understand what you need to do to qualify as well as learn about the best wealth-building investment options available. Moreover, with our genuinely self-directed IRA accounts, you are the one in control. Here are some things to help you get started:

Qualifying for a Roth IRA:

The IRS has enacted guidelines and restrictions on who can contribute to an account. Your income must fit specific criteria set by the IRS to open a Roth IRA. Also, it all depends on how you decide to file your taxes. It’s important to note that any income you choose to invest should come from work you performed yourself. It cannot come from any other investments.

The current Roth IRA income limits for 2021:

Single taxpayers with a MAGI of $125,000 can make a full contribution, and those with a MAGI between $125,000 and $140,000 can make a lesser contribution. Married taxpayers can make full contributions where their MAGI is $181,000 (and lesser contributions for a MAGI between $198,000 and $208,000).

If you have earned income in 2021 that falls under what’s outlined here, you can contribute to a Roth IRA account. However, how much you can contribute also depends on your age.

If you’re 49 or younger: You can contribute $6,000 (for 2021).

If you’re married: Each person can contribute $6,000, even if only one person has a paying job. There are also a few other key differences, so be sure to ask a Quest IRA specialist about spousal Roth IRAs.

If you’re 50 or older: You have the same contribution limit of $6,000, but in addition to this, you are also allowed to contribute an additional $1,000 to “catch up” for a total of $7,000. Please note: this is also true for spousal accounts if your spouse is also 50 or older.

If you cannot contribute due to the limitations listed above, please give us a call to discuss your options!

Here at Quest Trust Company, we are committed to helping you navigate your financial future. Please reach out to a Quest IRA specialist today for more information about Roth IRAs and how you can open an account. Also, be sure to check out our other blog posts for more information on Roth IRAs.

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