Can anybody contribute to a roth ira?

With a Roth IRA, you've already paid taxes on the money you invest in your account, so your contributions are considered after paying taxes. However, the balance of the Roth IRA is included in your taxable estate for tax purposes, just like a traditional IRA would. The total contribution to all of your traditional and Roth IRAs cannot exceed the annual maximum for your age or 100% of your earned income, whichever is less. This amount is used to determine your deductibility for the traditional IRA or your eligibility for Roth IRA contributions.

People with traditional IRAs should start receiving the required minimum distributions when they turn 72, but there is no such requirement for Roth IRAs. Roth IRAs are open to anyone earning income in a given tax year, as long as they don't earn too much or too little. Investing in a Roth IRA is fairly simple, but first you need to make sure that you meet the income requirements mentioned above. The reason is that you've already paid taxes on your contributions, so your higher tax bracket won't result in a high tax bill when the time comes to enjoy your hard-earned money.

Unlike conversions and earnings, contributions to a Roth IRA are not subject to any retention period, so in most cases, you can withdraw them without paying taxes or penalties at any time. The main benefit of a Roth IRA is that, unlike a traditional IRA, you can make tax-free withdrawals on your contributions and earnings once you retire. The five-year earnings rule also begins on January 1 of the year you open and contribute (or convert) your first Roth IRA. However, the tax benefits of investing in an IRA start only when you start putting money into the account.

If you think you'll be in a higher tax bracket when you retire than you are now, a Roth IRA may be more beneficial than other retirement accounts, such as a traditional IRA. By contrast, deposits in a traditional IRA are generally made with pre-tax money; you usually get a tax deduction on your contribution and pay income tax when you withdraw money from the account during retirement.