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ROTH IRA RIBA FREE CD SAVINGS ACCOUNT

DEADLINE FOR CONTRIBUTION FOR TAX YEAR IS APRIL 15th OF NEXT YEART
(4-15-25 for Tax Year 2024)

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A Roth IRA is an Individual Retirement Account to which you contribute after-tax dollars. While there are no current-year tax benefits, your contributions and earnings can grow tax-free, and you can withdraw them tax-free and penalty free after age 59½ and once the account has been open for five years.

Your Savings are Invested in a Bank of Whittier Riba Free CD (RF CD)

Open a Bank of Whittier RF CD Roth IRA account

• There is no maximum age limit to contribute to a Roth IRA, so you can add funds after creating the account if you meet the qualifications.
• You can contribute up to $7,000, or $8,000 if you’re 50 or older.
• You’ll need to have the account open for at least five years to take penalty-free withdrawals in retirement. If you take out funds before then, you could face penalties.
• When you make contributions to a Roth IRA, it must be with earned income. You might save some of your salary or wages from a job. The income will need to be actively earned, meaning it must come from compensation. Passive income, such as money received from rental investments, cannot be contributed.

If you are a single person, you can put funds in a Roth IRA if you earn up to $150,000 in 2025. After that, the amount you are eligible to contribute is phased out until your income exceeds $165,000, at which point you can no longer put money directly in a Roth IRA. For married couples, the income threshold to make full contributions is less than $236,000 in 2025, and if your joint income exceeds $246,000, contributions can no longer be made.

The major advantage of the Roth IRA is that qualified distributions are not considered taxable income, meaning both contributions and earnings are distributed free of income taxes.

For distributions to be qualified, your Roth account must be at least five years old. In addition to the five-year rule, a qualified distribution must fit one of the following eligibility requirements:

• The owner is at least age 59½.
• The original owner dies.
• The owner meets disability requirements.
• The distribution will cover qualified first-time homebuyer expenses of up to $10,000.

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