HO147 Roth IRA Fact Sheet by shitingting


									                                               Roth IRA
                                               Grow Your Retirement
                                               Funds and Save on Taxes

                                              What is a Roth IRA?
                                               The Roth Individual Retirement Account (IRA) is a retirement
                                             investment plan that offers another option for people to invest in for
                                          retirement. It is popular because of the benefits it offers.

                                       The decision to open a Roth IRA should be based on a number of factors, such
                                      as your age, current income tax rate, expected income tax rate in retirement,
                                     how many years you will invest and the expected rate of return. To help you
                                    analyze these often-complicated factors, it makes sense to seek the help of an
                                   investment professional.

Features and benefits of a Roth IRA                             a Roth IRA is $5,000 for individuals and $10,000 for
Key benefits of a Roth IRA:                                     married couples. These limits are higher for individuals
                                                                age 50 and older.
• Contributions grow tax-deferred
  Contributions to a Roth IRA are not tax-deductible,        • Conversion
  but they can be withdrawn tax-free (this contrasts to a      A Traditional IRA can be converted into a Roth IRA;
  Traditional IRA, in which contributions may be tax-          however, you will need to pay income tax on the
  deductible and taxes are owed on withdrawals).               converted assets. The money for the tax should come
                                                               from assets outside of your IRA. Otherwise, if you use
                                                               funds from your IRA to cover the taxes, you’ll owe a 10
• Withdrawals are not mandatory during your lifetime
                                                               percent penalty for early withdrawal if you’re under
  Unlike a Traditional IRA, you are not required to start
                                                               age 59½ because 100 percent of the previous IRA was
  making withdrawals after age 70½. If you don’t need
                                                               not placed into the new Roth IRA. This may set back
  the money, the account continues to grow tax-free. In
                                                               your retirement savings too much to make a Roth IRA
  addition, you can continue to put money into a Roth
                                                               Rollover worthwhile.
  IRA after you reach 70½ as long as the money comes
  from earned income, not investment income. Because
  you are not required to make withdrawals during your       • Tax-Free Earnings
  lifetime, a Roth IRA becomes an estate planning tool         Earnings can be taken out tax-free and penalty-free if a
  because you can pass your account, intact, to heirs.         Roth IRA has been held for at least five years and you
                                                               meet one of the following: you are over the age of
                                                               59½, the funds (up to $10,000) are used for the
Other important features of a Roth IRA:
                                                               purchase of a first home, or the withdrawal is due to
                                                               death or disability.
• Contribution levels
  In 2010 and 2011 the maximum annual contribution to

                                                                                                                      – continued
                                                   Who should consider a Roth IRA?
                                                   Although each situation is unique, in general, a Roth IRA may meet your needs if:

    Embrace the Future                             • You expect your income tax rate to increase or stay high at retirement.

                                                   • You have the cash outside your IRA to pay the tax if you roll over a Traditional
                                                     IRA into a Roth IRA.

                                                   • You are close to retiring or are already retired and anticipate that you will not
                                                     need all of the money in your Traditional IRA.

                                                   • You want to use your Roth IRA as an estate planning tool.

                                                   • You are under age 59½ and want to use a tax-sheltered investment for key
                                                     expenses, such as a first house.

                                                   • You may need to access your account within five years. If so, the Roth IRA
                                                     offers favorable tax treatment because you may withdraw contributions tax-free
                                                     at any time.

                                                   Setting up a Roth IRA
                                                   Lincoln Investment can help you set up a Roth IRA. You can look to us to help you
                                                   define your financial situation and objectives, and help you determine if a Roth IRA
                                                   is right for you. Your Lincoln Investment financial representative will also help you
                                                   make investment decisions and provide ongoing advice.

                                                   Lincoln Investment Planning, Inc. — The Retirement Experts
                                                   Today, you may no longer rely on just your company pension and Social Security to
                                                   provide adequate funds for retirement. You should consider developing a retirement
                                                   investment plan that makes maximum use of available tax benefits so that your
  K.W. Gutshall & Associates                       retirement assets will grow more quickly. If you meet the criteria, consider a Roth
  P.O. Box 150639
                                                   IRA; however, because the rules governing a Roth IRA are complex, you should
  Austin, TX 78715-0639
                                                   work with a financial and tax professional.
                                                   Lincoln Investment Planning, Inc. has specialized in providing retirement planning
  Supervising Branch:
  Lincoln Investment Planning, Inc.
                                                   services since 1968. A Lincoln Investment financial representative looks forward to
  218 Glenside Avenue                              working with you to explore the opportunities offered by a Roth IRA.
  Wyncote PA 19095
  (215) 887-8111

  Advisory Services and Securities offered
  through Lincoln Investment Planning, Inc.
  Registered Investment Advisor, Broker/
  Dealer, Member FINRA/SIPC.
  Lincoln Investment and K.W. Gutshall &
  Associates are independently owned and
  each is responsible for its own business.

HO147 01/11

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