Retirement Plans

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Roth IRA

Self Direct Your Roth IRA: Pay Taxes Now and Enjoy Tax-Free Earnings the Rest of Your Life

One of the best ways to save for retirement is with an Entrust Self Directed Roth Individual Retirement Account. Why? Because the earnings on your investments are free from Federal income tax as long as certain conditions are met.

If your current Roth IRA does not allow self-direction, you may transfer funds to an Entrust self directed Roth IRA so that you may choose your investments.

Currently, you may jump start a tax-free individual retirement account by converting your Traditional IRA to a self directed Roth IRA. While this is a taxable event, your earnings will grow tax free.

As of 2008, you may convert your current employer plan, such as a 401(k), into a Roth IRA. While this is a taxable event, it does provide you a means of funding your Roth IRA with more than the annual contribution of $5,000 plus a catch-up provision of $1,000.

Another advantage of a Roth IRA is that contributions may be made even after you are 70½, and you are not required to take distributions. In most cases, a Roth IRA holder may withdraw the principal amounts invested without any tax liability.

How to determine if an Entrust self-directed Roth IRA is the right retirement plan for you:

• You want tax-free earnings and no taxation on withdrawals.
  
• You are already saving for retirement with an employer-sponsored plan.
• Your income does not exceed the income limits for contributing (see below).
• You want to invest a retirement plan but may need to access your savings.
• You expect your tax rate during retirement to remain the same or to be at a higher level than your current tax rate.
• You want to self-direct your IRA investments.

Roth IRA Eligibility and Roth IRA Income Limits

To be eligible to convert your Traditional Individual Retirement Account or employer plan to a Roth IRA or a self directed Roth IRA, you must have a Modified Adjusted Gross Income (MAGI) of $100,000 or less. Another important item to note is that in 2010, the income limit for conversions is eliminated.

You can contribute to an Entrust self directed Roth IRA if you have taxable income and your modified adjusted gross income is less than:

Married individuals filing jointly:

• $176,000 for 2009
• $177,000 for 2010
  

Single or head of household:

• $120,000 for 2009
• $120,000 for 2010
  

Married filing separate returns:

• $10,000
  

Roth IRA Contribution Limits and Roth IRA Catch-Up Contributions

Traditional IRA Contribution Limits, Roth IRA Limits, Catch Up Contributions and IRA Rules

Funding Your Self Directed IRA - With a IRA Rollover,  Transfer or Contribution

The most common technique to funding a self directed traditional IRA is through making a contribution to your account. You may also roll over or transfer funds from an existing employer plan, such as a 401(k), a pension plan or another Traditional IRA. If your current traditional IRA does not allow self-direction, you may also transfer those funds to an Entrust self directed Traditional IRA so that you may choose your investments.

For more information on Roth IRAs, please visit the Entrust Learning Center.

Contact an Entrust professional in one of our local offices to establish a Roth self-directed IRA or real estate IRA, or open an account.

1) Entrust is not a tax advisor.