The assets put into a Roth IRA fund already have their taxes paid on them, and Uncle Sam lets them grow tax-free. I don't know about you, but I think that is great, since if invested correctly those assets will be much higher. And just think all of that money will belong to you, since Uncle Sam already got his share.
Below are some (but not all) of the Roth Ira rules if your modified Adjusted gross income is less than $169,000 and you're married filing jointly or a qualifying widow or widower (for other income levels check the IRS publications online concerning Roth IRA rules):
1) Contribution limit for a Roth IRA is $5,000 for 2008, unless you are 50 years of age or older then it is $6,000. 2) You must have taxable compensation for the year you are contributing to a Roth IRA. The definition of a Roth IRA taxable compensation for this purpose is salaried, bonuses, alimony, commissions and other earned income for providing services. Passive income such as dividends, rental income and interest to not qualify as compensation. 3) You can convert a traditional Ira to Roth IRA, but you will be taxed on the amount you to convert due to the fact that the traditional Ira was not taxed when you contributed it. Since we live in this great country, we need to give Uncle Sam his share sometime along the way. 4) Unlike a traditional Ira you do not have to start withdrawing on your funds at any certain age. There are Roth Ira rules concerning distribution after the owner's death, but I won't go into those in this article.
The definition of a Roth Ira asset can include, but not limited to these items:
1) Residential Real Estate 2) Tax lien certificates 3) Commercial real estate 4) Gold bullion 5) Publicly traded stocks, mutual funds, and bonds 6) Real estate notes 7) Equipment leasing
When most people thing of a Roth Ira they think in terms of CD's, stocks or mutual funds. They don't know they can have a self-directed Roth IRA, where they can invest in a stable investment such as real estate that can provide them with both an income and an appreciable asset. They can use the potential of real estate to increase their retirement accounts, and with a Roth Ira those increases will be tax-free.
Now that you know the definition of a Roth Ira you need to move forward to do something about investing in one. If you haven't already started, now is the time to start putting your plans together for your 2008 Roth Ira contributions. Check out how you can increase your wealth potential following Roth Ira rules.