Advanta Roth IRA Information

Summary: Passed into law in 1997, this unique saving plan provides for post tax savings - with the advantage that all the income growth is tax deferred until withdrawal. If withdrawals take place at least five years after funding, and after the age of 59.5, there is no taxation.

Eligibility: Everyone with earned income, not exceeding the following Modified Adjusted Gross Income (MAGI) limits is eligible to contribute to a Roth IRA.

* Married Filing Separate: $10,000 
* Single: $120,000
* Married Filing Joint: $176,000 
* Contribution Limits: $5,000 + $1,000 catch-up provision if age 50+ (2011)

Non-working spouse may be eligible for equal contributions based on working spouse's income

Deductibility: Contributions are not deductible

Distribution Rules: Withdrawals for IRA holders who have had their Roth IRA funded for at least 5 years and reached the age of 59.5 are not taxed. For early withdrawals, a ten percent penalty and ordinary income tax will apply to the Roth IRA earnings. The contributed portion of the Roth IRA is not taxed. Certain additional rules apply to Roth IRAs which have been converted from pre-tax retirement plans.

Required Minimum Distribution: None required