Your Guide to Roth IRAs

[@gbpf57]

I appreciate everything you said here. I wish I would have been listening to this 10 years earlier!

[@ChrisRI1000]

As someone who has done a lot of research I still get ideas from your discussions I hadn't thought of.

[@davideberhart9523]

Learning something new in every lesson John. Thanks.

[@felipesulbaran3383]

Excellent explanations. Thanks. Getting close in my case...

[@garry1214]

Always helpful, thanks for this information.

[@gloriathompson6606]

Not sure what you mean about the five year “rule”. My understanding is the funds that you put in can be withdrawn anytime. Only the growth on the investment has to stay. Please clarify.

[@CardinalAdvisors]

The 5 year rule starts with the opening of your first Roth IRA. From that’s date forward it is best to wait 5 years before you withdraw any money from Roths. If you do, the first money coming out will be considered interest and taxed. After you’ve paid tax on any interest earned, the rest of your withdrawal will be tax free. Best to wait 5 years!

[@danieljustdaniel9550]

Ok my question is for my son's SSDI that he gets, if I'm not mistaken in order to put into a Roth IRA you have to be working, is that correct? We want to place money from his SSDI and others that he will have in the future when he's by himself and have her some bad stories about the ABLE account money going back to the govt, if something was to happen to him. Is a Roth something we could do? Thanks!

[@CardinalAdvisors]

Daniel You must have income from work for a Roth contribution so no. Consider the ABLE account for that purpose.

[@bmp713]

Some articles say only the original Roth IRA account has to have been 5 years or older for withdrawals of earnings by a beneficiary to be tax free. But some seem to indicate the Inherited Roth IRA account the beneficiary opens to hold the money has to be 5 years old. The Roth IRA I inherited was more than 5 years old at time of passing. However my brokerage managing the inherited Roth IRA entered a "T" for box 7 on my 1099-R and not a "Q" for qualified distribution which added the full taxes on it. Do I have to pay any taxes on distributions from the Inherited Roth IRA account holding the money or do I have to wait 5 years myself also? Why do you think the brokerage entered "T" instead of "Q"?

[@CardinalAdvisors]

The 5 year clock for all Roths starts when the first Roth is started. It ends when the account owner dies. The beneficiary doesn’t concern themselves with 5 yr clock

[@bmp713]

@@CardinalAdvisors Thank you. I am certain my mom's Roth was over 5 years old but the current brokerage has only held it since 2018. She passed in 2021. Why might the brokerage use a T code if the beneficiary Roth does not need to be 5 years old? Is it because the current broker only held it 3 years before her passing? How can I report my distribution as nontaxable if I have to use the T code?

[@CardinalAdvisors]

You don’t owe taxes on this. Have your tax advisor complete your return correctly showing no tax.

[@kathymiller4447]

Does the $7000 include the interest made in the account?

[@scott1441]

There needs to be policy changes by our gov’t wherein non earned income , such as Social Security , can be invested into a ROTH IRA and limits on contributions needs to be more generous

[@charliehargrave7458]

Will never happen. When trump reduced the corporate tax rate from 35% to 21% for Walmart and amazon you and i and all working people have to pay up to 37% and we lost all of our tax deductions in the process. They eventually tax 100% of social security.

[@matttillman7097]

You didn't lose your tax deductions. The standard deduction just increased to exceed what you itemized. So your deduction increased.