Making the most of a Roth IRA

Making
the most of a Roth IRA

Retirement
& Longevity

Consider
the benefits and limits associated with making post-tax contributions to an
IRA.

Thinking
about opening or contributing to a Roth IRA? Learn more about the benefits of
this type of retirement account and your possible eligibility to contribute.

Consider
the positives

The key
benefits of Roth IRAs include:

All
distributions from the account can be tax free. Although contributions to a
Roth IRA are not tax deductible, earnings grow free of taxes. When you reach
age 59 1/2, if the Roth IRA has been in place for at least five years, any
withdrawal from the contributions and earnings is tax free. Avoiding a tax bite
at the time of withdrawal in retirement can be attractive – particularly for
investors who anticipate having a higher marginal income tax rate at the time
of withdrawal than they do at the time of contribution.

No
required minimum distributions. While distributions from a traditional IRA must begin
upon reaching a certain age, there are no similar requirements for a Roth IRA.

No age
limit on contributions. You can continue contributing to your IRA – Roth or
traditional – as long as you have earned income.

Withdrawals
may be made without penalty for a first-time home purchase. As with a traditional IRA, you can
withdraw funds from your Roth IRA (up to a lifetime maximum of $10,000) to make
a down payment on a first-time home purchase. A first-time homebuyer is defined
as someone who has not owned a home for two years prior to the purchase of the
new home.

Learn
your Roth limits

In 2025, an
individual may contribute up to $7,000 to their IRAs – $8,000 if they are 50
years of age or older. Keep in mind that modified adjusted growth income (MAGI)
phase-out limits apply.

Single
filer or head of household: The full Roth contribution limit is available to individuals
filing as single or head of household with a MAGI of less than $150,000. The
amount is phased out for MAGIs between $150,000 and $165,000.

Married
filing jointly: The
full Roth contribution limit is available to married individuals filing joint
returns with MAGIs of less than $236,000. The amount is phased out for MAGIs
between $236,000 and $246,000.

Married
filing separately: If you have not lived with your spouse at any point during the year and
file separately, MAGI limits mirror those for single filers and heads of
household. If you lived with your spouse at any time during the year and file
separately, no Roth contribution is allowed unless MAGI is less than $10,000.

Pendle Hill
Advisors is proud to contribute to the Montgomery County News with our weekly
curated financial news and topics. If you have any questions about the markets,
your financial plan, or anything, please feel free to reach out to our office
for a no cost initial consultation.

Kent Pendleton, AAMS®

Financial Advisor, RJFS

Pendle Hill Advisors LLC

14375 Liberty St, Ste 109 | Montgomery,
TX 77356

T 936-297-8267

Kent.Pendleton@raymondjames.com | www.raymondjames.com/pendlehilladvisors

Material
created by Raymond James for use by its advisors. Securities offered
through Raymond James Financial Services, Inc. Member FINRA/SIPC. Investment
advisory services are offered through Raymond James Financial Services
Advisors, Inc. Pendle Hill Advisors is not registered broker dealers and is
independent of Raymond James Financial Services.

Please
note that changes in tax laws or regulations may occur at any time and could
substantially impact your situation. While familiar with the tax provisions of
the issues presented herein, Raymond James financial advisors are not qualified
to render advice on tax or legal matters. You should discuss any tax or legal
matters with the appropriate professional. Material created by Raymond James
for use by its advisors.