What is a Roth IRA? A Roth IRA is an individual retirement account (IRA) that allows for qualified withdrawals in various conditions. Contributions to a Roth IRA are made with after-tax dollars, which grow in the Roth IRA account tax-free. In this video, I explain some of the basics regarding Roth IRA’s, Roth IRA distribution rules, Roth IRA early withdrawals, Roth IRA Max Contributions, and some examples on how the earlier you start contributing, the better.

Roth IRA limits are determined on a yearly basis. For 2021 the Roth IRA contribution limits are $6,000 for those under 50. For individuals over 50, the Roth IRA contribution limits are $7,000. Roth IRA’s are also subject to income limits. For example, the Roth IRA income limit for someone filing their tax return as single, the income limit is $140,000. For married couples, the limit is $208,000.

Between 2020 and 2021, the max Roth IRA contrition remained unchanged. Also, the Roth IRA withdrawal rules remained the same. There were some changes to the max income you could earn and contribution, and those changes are listed on the following link –

Difference between IRA and Roth IRA:
The main difference between a traditional IRA and Roth IRA is where the funds come from for contributions. With a traditional IRA, contributions are made pre-tax. For a Roth IRA, contributions are made with post-tax dollars. With a Roth IRA, you pay the taxes now so that when you make qualified withdrawals, you don’t have to pay any taxes. With a traditional IRA, your contributions are made pre-tax, but you end up paying taxes later in life when you make withdrawals from the account.

If you’re interested in opening your Roth IRA, here’s a few links to some institutions that offer them – (these are NOT referral links)

Vanguard Roth IRA –
Fidelity Roth IRA –
Charles Schwab Roth IRA –
TD Ameritrade Roth IRA –
Chase Roth IRA –
Bank of America Roth IRA –

Link mentioned in video:
Roth IRA Qualified Distributions –

0:00 – Intro
1:00 – Roth IRA Basics
3:35 – Roth IRA Contributions
5:36 – Qualified Distributions
7:54 – Example
8:50 – Wrap Up

This video is for educational purposes only.
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A Roth IRA is a type of individual retirement account that allows individuals to save money for their retirement years. Unlike traditional IRAs, Roth IRAs are funded with after-tax dollars, meaning individuals do not get a tax deduction for contributions made to the account. However, the funds grow tax-free and individuals can withdraw the money tax-free in retirement.

One of the most attractive features of Roth IRAs is their flexibility. Individuals have control over how they invest their money, and can choose from a wide range of investment options, including stocks, bonds, mutual funds, and exchange-traded funds. Additionally, traditional IRAs require individuals to start taking distributions at age 72, while Roth IRAs have no required minimum distributions.

However, there are contribution limits to Roth IRAs. In 2021, the contribution limit for individuals under age 50 is $6,000 per year. For those over age 50, the limit is $7,000 per year. It is important to note that individuals may not be able to contribute the full amount if their income exceeds certain thresholds. For single filers, the ability to contribute begins to phase out at an adjusted gross income (AGI) of $125,000, and contributions are not allowed if AGI exceeds $140,000. For married filers, the ability to contribute begins to phase out at an AGI of $198,000, and contributions are not allowed if AGI exceeds $208,000.

It is also possible to make contributions to a Roth IRA for a spouse, as long as the spouse has earned income. This is known as a spousal IRA.

In summary, a Roth IRA can be a valuable tool for individuals to save for retirement. With tax-free growth and withdrawals, and no required minimum distributions, they offer flexibility and control over investment choices. However, it is important to be aware of contribution limits and income thresholds that may impact the ability to contribute to a Roth IRA.