Roth IRAs

  • Established in 1998, named after former Senator William Roth, chief legislative sponsor
  • Provides retirement savings opportunity on a tax-advantaged basis
  • Main Advantage Tax-Free Income Potential
  • Main differences to traditional IRA
    • No deductible contributions
    • Owner has no Required Minimum Distributions (RMD)
    • Tax-free income with qualified distributions
    • Generally, must meet both of the 2 following conditions
      • Distribution takes place at least 5 years after 1st contribution to a Roth IRA and
      • Roth IRA owner has attained age 59

Conversion Opportunities

  • Converting from a tax-deferred retirement account to a Roth IRA
  • Income taxes paid on conversion
  • 10% premature distribution penalty does not apply
    • If taxes are paid outside of IRA assets

What Accounts Can Be Converted?

  • Individual Accounts
    • Traditional IRAs
    • Inherited IRAs (taken over as their own from deceased spouse)
  • Self-employed/small business accounts
    • SEP IRAs
    • SIMPLE IRAs
  • Employer accounts from previous job
    • Rollover IRAs
    • 401(k) plans
    • 403(b) plans
    • 457 plans

The information provided is not written or intended as specific tax or legal advice and may not be relied on for purposes of avoiding any Federal tax penalties. MassMutual, its employees and representatives are not authorized to give tax or legal advice. Individuals are encouraged to seek advice from their own tax or legal counsel.