Open a Roth IRA

A Roth IRA is a retirement savings account that allows your money to grow tax-free. This is an after-tax account, meaning the IRA owner of a Roth must pay taxes upfront for all money contributed, however all growth within the account is tax deferred, but if you take a qualified distribution, it can be potentially tax free. This is a major advantage for the younger population, as they can make contributions over a lifetime and watch their funds grow.

Open your Roth IRA today!

Answers to some of the most frequently asked investing questions (FAQs) about Roth IRAs

How much can you contribute to a Roth IRA?
“For 2023, the maximum contribution you make to a Roth IRA is $6,500 ($7,500 if you’re age 50 or older).”

Can you have multiple Roth IRAs?
“You can have multiple Roth IRAs.”

Can I buy real estate with a Roth IRA?
“Buying real estate with an IRA or a solo 401k certainly can be done! You just need to find a custodian that will hold non-traditional or ‘alternative’ investments.”

How do I use a Roth IRA to buy a house?
“You first need to find a custodian that will hold non-traditional or ‘alternative’ investments and establish an IRA with them. You will then locate the house you want to purchase, and typically, your custodian will require you to sign some internal forms. After making sure the contract is in the name of the IRA, your custodian will purchase the property for you on behalf of your IRA.”

Can I transfer/rollover a 401k to Roth IRA?
“You can move a 401(k) to a Roth IRA. Typically, you will rollover the 401(k) into a Traditional IRA (keeping the taxes the same between like accounts) and then will initiate a Roth Conversion to get the funds from the Traditional IRA, a pre-tax account, to the Roth IRA, and after tax account. Note: a Roth conversion is a taxable event.”

How do I transfer a 401k to Roth IRA?
“First, you will rollover the 401(k) into a Traditional IRA (keeping the taxes the same between like accounts), and then you will initiate a Roth Conversion to get the funds from the Traditional IRA to the Roth IRA. Note: a Roth conversion is a taxable event.”

Can anyone open a Roth IRA?

“To have and contribution to a Roth IRA, you must have earned income. Additionally, certain income restrictions put limitations on directly contributing to a Roth IRA. For single filers, your Modified Adjusted Gross Income (MAGI) must be under $153,000 for 2023. If you’re married and filing jointly, your MAGI must be under 228,000 for 2023.”

When can you take out Roth IRA money?
“At age 59 and a half, you can take Roth IRA distributions tax-free and penalty free as long as you have had the account open for 5 years. Note: You can always withdraw contributions you made to your Roth IRA at any time, tax and penalty-free.”

Can you borrow against your Roth IRA?
“You aren’t allowed to borrow against or take out a common loan from an Roth IRA.

What are some advantages and disadvantages of the Roth IRA?
“There are many benefits to having a Roth IRA, including tax-free distributions and no required minimum distributions. Some disadvantage being limitations on contributions and “the five year clock” (the period of time the account must be open before distributions can be tax and penalty-free).

What is the last day to contribute to Roth IRA?
“The last day to contribute to a Roth IRA is usually the tax filing deadline.

Where can I open Roth IRAs?
“Most financial institutions will offer IRAs like the Roth IRA. Other specialized companies, like Quest Trust Company, can offer unique accounts and services like Self-Directed IRA, which allow you to invest in the broadest possible spectrum of options. Once you have found the custodian of your choosing, applications can often be found online and in-person.”

How do you set up a self-directed Roth IRA?
“You will first need to find the custodian you like! Once you have picked a good custodian, you will complete some paperwork (typically an application) and in a few days, your account will be open. *Processes will vary by custodian.”

How much does it cost to open a Roth IRA?
“Typically, this will depends on the custodian that you choose. At Quest, we charge a one-time fee of $100.”

If I have a crypto investment in a Traditional IRA, can my account be converted into a Roth IRA?
“Unfortunately no, this has been deemed administratively unfeasible.”

What is the minimum to open a Roth IRA?
“This is something that will vary dependent on which custodian you choose. At Quest, we do not have any account minimums for Roth IRAs.”

It’s easy to invest with a Self-Directed Roth IRA!

  • Open a Roth IRA account at Quest
  • Fund your account by making a contribution, transferring from another Roth account, or rolling over an old 401K.
  • Invest in what you know best!

Income Limits:

Tax Filing Status 2023 Tax Year
Single or Head of Household $138,000 – $153,000 (2023)
Married Filing Jointly $218,000 – $228,000 (2023)
Married Filing Separately  $0 – $10,000 (2023)

Qualified distributions V Non-Qualified distributions

A qualified distribution from a Roth IRA is tax-free and penalty free, providing the 5 year aging requirement has been satisfied and one of the following has been met:

  • Over age 59.5
  • Death or disability
  • Qualified first-time home purchase

A non-qualified distribution is subject to taxation of earnings and a 10% additional tax unless an exception applies. Several exceptions exists that enable Roth IRA account holders to withdrawal cash from Roth IRA’s that otherwise would be subject to income taxes and a 10% penalty:

  • You have un-reimbursed medical expenses exceeding 7.5% of your Adjusted Gross Income (AGI).
  • You are paying medical insurance premiums after losing your job.
  • The distributions are not more than your qualified higher educational expenses (for yourself or eligible family members).
  • The distribution is due to an IRS levy of the qualified plan.
  • The distribution is a qualified reservist distribution.
  • The distribution is a qualified disaster recovery assistance distribution.
  • The distribution is a qualified recovery assistance distribution.