What is a Roth IRA?The Mutual of America
Roth IRAis a type of individual retirement variable annuity contract that generally allows you to receive distributions on a tax-free basis. The Roth IRA does not provide up-front income tax deductions for contributions like there can be with a Traditional IRA. All contributions to a Roth IRA are made on an after-tax basis, but the Roth IRA provides the opportunity for tax-free investment earnings and tax-free distributions if qualified distributions are made.
Unlike other types of IRAs, you are not required to begin taking a distribution at any specific age and you can continue to make contributions as long as you have earned income, even after age 70½. Mandatory distributions are only required to be made after the death of the Roth IRA contractholder.
- Single taxpayers with a modified Adjusted Gross Income (AGI)1 of $118,000 or less in 2017 can contribute up to $5,500 per year.
- For single taxpayers with an AGI between $118,000 and $133,000, the maximum allowable contribution to a Roth IRA is proportionately reduced.
- Single taxpayers with an AGI of $133,000 or more in 2017 may not contribute.
- Married taxpayers filing joint tax returns with a modified AGI of $186,000 or less in 2017 can contribute up to $5,500 each per year, even if only one spouse has compensation.
- For married taxpayers filing joint returns with a modified AGI between $186,000 and $196,000 for 2017, the maximum allowable contribution to the Roth IRA is proportionately reduced.
- Married taxpayers filing joint returns with an AGI of more than $196,000 in 2017 may not contribute to a Roth IRA.
- Married taxpayers filing separate returns cannot contribute to a Roth IRA.
1The modified AGI is used for calculating Roth IRA contribution limits. Please refer to Internal Revenue Code Publication 590 or consult with your tax adviser.
How much may I contribute to a Roth IRA? The maximum contribution is currently the lesser of $5,500 or 100% of your compensation, if you are single, or $5,500 for each spouse or 100% of your combined compensation if you are a married couple filing jointly.
Both maximums apply to an individual's total contributions to all Roth IRAs (except rollovers) and are reduced by any contributions you may have made to any other type of IRAs.
The annual dollar limitation increase for year 2017 and subsequent years is $5,500 indexed for inflation in $500 increments. Rules limiting Roth IRA contributions based on the modified AGI apply.
REMINDER:Indexing does not automatically increase the limit each year; increases only apply when the inflation-adjusted limit equals or exceeds the next incremental amount.
Learn more about Contributions & Withdrawals .
Age 50 "catch-up" contributions The dollar limits (before any phase-out based on the modified AGI) are further increased by an additional amount for individuals who are age 50 or older at any time during the year (i.e., attain age 50 by December 31). Thus, for example, the IRA contribution limits for 2017 are:
- $5,500 for individuals under age 50
- $6,500 for individuals age 50 or older
NOTE:Although the additional limit increase for 50-year-olds is referred to as a "catch-up" contribution limit, it does not require that the individual has contributed less than the maximum limit in prior years as other, traditional catch-up contribution rules do. The full additional age 50 contribution can be made even if maximum contributions have always been made in all prior years, subject to phase-out rules based on the modified AGI.
Learn more about Features & Benefits.
Mutual of America's IRAs are individual variable annuity contracts and are suitable for long-term investing, particularly for retirement savings. The value of a variable annuity contract will fluctuate depending on the performance of the Separate Account investment funds you choose. Upon redemption, you could receive more or less than the principal amount invested. A variable annuity contract provides no additional tax-deferred treatment of benefits beyond the treatment provided to any qualified retirement plan or IRA by applicable tax law. You should carefully consider a variable annuity contract’s other features before making a decision.
Form IRA-2004 or applicable state variation.