Roth IRA
A Roth IRA (Individual Retirement Account) is one of the most popular ways to save for retirement. Below are some of the key features to help you determine if a Roth IRA might be the right choice for you:
- ​Features tax-free distributions if withdrawn after age 59 ½ and the account has been open for at least five years
- Offers investment flexibility
- No required minimum distributions during original account owner’s lifetime
- Expectation of same or higher income tax bracket after retirement
- Interested in increased savings for retirement
Unlike a traditional IRA, Roth IRA contributions are not tax-deductible.
Eligibility Requirements
For the current Roth IRA contribution eligibility requirements, visit the IRS website.
Investment Options
You have various options for investing in a Roth IRA:
- Mutual Funds
- Stocks
- Bonds
- Annuities
Distributions
Distributions from a Roth IRA are tax free and penalty free if they meet the criteria for a qualified distribution. To qualify, the account must have been open for at least five years, and the account owner must be age 59 1/2 or older or meet a qualifying exception such as a first-time home purchase, disability or death.
For non-qualified distributions, taxes and a 10% early withdrawal penalty may apply to the portion of the withdrawal that represents earnings, while contributions can be withdrawn tax free. Certain exceptions can waive the 10% penalty but not the taxes on earnings. For a discussion of the exceptions, please visit with a qualified tax advisor.
Contribution Deadline and Limits
The maximum annual contribution to a Roth IRA is the lesser of $7,000 for both tax year 2024 and 2025 or 100% of compensation. For those individuals who are 50 or older at the end of the taxable year, an additional catch-up contribution of $1,000 may be made.
Contributions aren't tax deductible and are made with after-tax dollars. If eligible, you may open or contribute to an existing Roth IRA for the tax year 2024 until Apr. 15, 2025.
Existing IRA Transfer
Do you have an existing Roth IRA you would like to transfer to Frost? There are a few simple steps to get your Roth IRA balance transferred:
- ​Contact a Frost wealth advisor at 1-800-437-5107
- Provide your non-Frost Roth IRA account information to Frost
- A Frost wealth advisor will assist in the completion of documentation necessary for transfer
- Frost will request the transfer directly from your prior institution
Transfers can take two to six weeks depending on the assets being transferred.
Contact one of our Frost wealth advisors by calling
1-800-437-5107 for more details.