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What is a Roth IRA?

With a Sandia Area Roth IRA, retirement savings contributions to the account are subject to regular federal and state income taxes. Earnings on a Roth IRA are tax-free if your Roth account has been open for at least five years and the savings are withdrawn after age 59½. This is true for both federal, and in most cases, state income taxes. Contributions (not earnings) can be withdrawn tax-free at any time, and there is no required minimum distribution at or after age 73.

Tax advantages

  • Contributions are not tax-deductible.1
  • Earnings grow tax-free, subject to some limitations.
  • Tax-free withdrawals of original contribution are allowed; potentially tax-free withdrawal of earnings if part of a qualified withdrawal.

Tax Advantages




  • Maximum contributions for 2023: Up to $6,500 for those under 50; $7,500 for those 50 and up*.


  • No age restrictions.
  • If you are single, you may have a modified Adjusted Gross Income (AGI) of up to $138,000 in 2023 to make a full contribution.1*
  • If you are married filing jointly, you may have a modified AGI of up to $218,000 in 2023 to make a full contribution.1*


Withdrawals, penalties and distribution requirements

  • Contributions can be withdrawn anytime without taxes or penalties.
  • Earnings can be withdrawn, without taxes or penalties, if you are 59-1/2 and your account has been open five years or more.
  • There are no distribution requirements.

1. Not intended as tax advice. Please consult a tax professional. The above descriptions are meant to be educational in nature. Certain restrictions apply to every type of IRAs to take full advantage of their favorable tax treatment. It's important to understand the requirements and limitations on the various IRAs. Sandia Area Membership is required for all accounts. *Accourding to IRS.gov IRA contribution limits.


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