By Todd I. Youngdahl, CFP®
Roth IRAs are great savings vehicles for many reasons. They can be a tax-free income source in retirement. They don’t have required minimum distributions when you reach age 70½ as with most other tax-advantaged retirement plans. And, they have flexible inheritance rules that will benefit your children and grandchildren.
The only problem with Roth IRAs is that you may not be eligible for one. You likely make too much money. For 2019, you are ineligible to contribute directly to a Roth IRA if you are single with an adjusted gross income (AGI) over $137,000 or a married couple with an AGI over $203,000.
Why tout the benefits of a Roth IRA to people who may be unable to contribute directly to one? Another contribution path exists. It is called a Backdoor Roth IRA which offers an alternative way to make contributions to a Roth IRA.