California Roth IRA

Roth IRAs, unlike traditional IRAs, have a simple premise: you pay income tax going in, rather than when you pull out. Named for the late Sen. William V. Roth from Delaware, the Roth IRA represents an enhanced level of flexibility for people saving for their retirement. The Roth IRA is a type of account that you establish through a qualified broker. Since 2002, you can contribute up to $3,000 annually to your Roth IRA. Any contributions that you make to your Roth IRA are considered "after-tax," and cannot be deducted from your tax return. However, when it is time for you to draw money from your account, you will not pay income taxes on the growth of your account. If you're in a high tax bracket, that can amount to tremendous savings. The Economic Growth and Tax Relief Reconciliation Act of 2001, signed into law by President Bush, increased the annual amount you can contribute from $2,000 to $3,000 ($3,500 if age 50 or over). Plus, in 2005, the annual amount increases to $4,000. And in 2008, the maximum annual contribution rises once again to $5,000

See Also: California health insurance; California auto insurance; California car insurance; California group health insurance; California renters insurance; California term life insurance;

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