The Roth Series I: The Roth IRA

The Roth IRA, Backdoor Roth IRA and Mega Backdoor Roth IRA are oft misunderstood and underutilized retirement savings strategies. In my Roth IRA three-part series this week, I'm going to break down each Roth IRA strategy, who is eligible to use them, and what you need to know when using them.


This article focuses on the center of the Roth universe: the Roth IRA.

You can find the other articles from the Roth IRA series here.


Who Is Eligible To Contribute To A Roth IRA?
The regular ol' Roth IRA is a fairly straightforward retirement savings vehicle. As long as you are under the preset income limits (reassessed annually by the IRS) and you have earned income equal to or greater than your contribution amount up to the maximum contribution amount (also reassessed annually by the IRS), then you have an opportunity to take advantage of tax free investment growth and completely tax free withdrawals on qualified distributions from your Roth IRA in retirement.

Roth IRAs have the same rules regardless of age, there is no minimum or maximum age to qualify, and there are no RMDs- the Required Minimum Distributions seen with Traditional (aka pre-tax) retirement accounts such as Traditional 401(k)s and Traditional IRAs.

Let's talk about those annual limits. For 2023, a full contribution can be made by those filing taxes as:
  • Married Filing Jointly with a MAGI up to $218,000, or a partial amount up to $228,000
  • Single with a MAGI up to $138,000, or a partial amount up to $153,000.

For 2023 the contribution limit on all IRAs for those under age 50 is $6,500. Those over age 50 can contribute an extra $1,000 as what's called a catch-up contribution.

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Want to read the rest of this article? Visit Sage Financial's website for free access to this blog article.

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