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The definitions contained herein are for general information only and are not designed for use in connection with the interpretation of any insurance policy or annuity policy issued through Insurance Answer Center.
Life Insurance Glossary Terms  4 A B C D E F G H I J K L M N O P Q R S T U V W Y

Roth IRA

Roth IRA: Contributions to a Roth IRA are not deductible from current income. However, the buildup (e.g., interest and dividends) within the account, may be tax-free depending on how and when the taxpayer withdraws money from the account. To be a "qualified distribution" (i.e., tax-free) from a Roth IRA, the distribution must satisfy a five-year holding period requirement. In addition, a "qualified distribution" must be: 1. Made on or after the age of 59 +. 2. Made to a beneficiary, or the individual's estate, on or after the individual's death; 3. Attributable to the individual being disabled; or 4. A distribution to pay for "qualified first-time homebuyer expenses". The maximum yearly contribution to a Roth IRA is phased out for single taxpayers with income between $95,000 and $110,000 and for joint filers with income between $150,000 and $160,000.

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