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GEBA - Government Employees' Benefit Association geba

 
Roth IRA

The Roth IRA enables you to invest for your retirement and benefit from tax-free growth. GEBA's Member Services Representatives can speak with you about the specific uses of a Roth IRA and how it may be applied to your personal financial plan.

Eligibility: Anyone who has earned income. If you are single, your Adjusted Gross Income must be less than $101,000; if you are married, your combined Adjusted Gross Income must be less than $159,000.

Filing Status is AND Modified AGI is THEN
Single, Head of Household <$101,000 Contribute up to IRS annual limit
$101,000 - $116,000 Contribution Amount is Reduced
>$116,000 You can NOT contribute
 
Married Filing Jointly <$159,000 Contribute up to IRS annual limit
$159,000 - $169,000 Contribution Amount is Reduced
>$169,000 You can NOT contribute
 
Married Filing Separate Zero Contribute up to IRS annual limit
$1 - $10,000 Contribution Amount is Reduced
>$10,000 You can NOT contribute

Contribution Amounts:

Year Limit Over age 50 Limit
2005 $4,000 $4,500
2006 $4,000 $5,000
2007 $4,000 $5,000
2008 $5,000 $6,000
2009 $5,000 $6,000
2010 $5,000 $6,000
2011 $5,000 $6,000
2012 $5,000 $6,000



Investment Options:

  • Stable Value Account
  • Variable Annuity
  • GEBA MAX 

Withdrawal Restrictions: In order to make tax-free withdrawals, the owner is required to have held a Roth IRA for at least five calendar years and one of the following conditions must apply:

  • Distribution is made on or after the date on which the individual attains age 59½;
  • Distribution is made to a beneficiary on or after the owner's death;
  • Distribution is attributable to the disability of the owner; or
  • Distribution is for the first time home purchase up to $10,000.

Note: A distribution for education or medical expenses is NOT tax-free, but the IRS 10% penalty does not apply.

Required Minimum Distribution: No Required Minimum Distribution at age 70½.

When would a Roth IRA be the right choice?

  • If you are not eligible make a tax-deductible IRA contribution
  • If you expect to be in the same or higher tax bracket at retirement
  • If you are looking for a way to pass on assets to heirs tax-free

The differences between the Roth IRA and the Traditional IRA:

  Contributions Distributions
Roth IRA Not tax-deductible - Tax-free if "qualified
  distribution"
- Not required at age 70½
Traditional IRA May be tax-deductible - Taxed as ordinary income
- Required at age 70½

Income Tax Implications: GEBA does not provide tax services or advice to its members. We always recommend that you consult a tax professional for updated tax information and guidance on your particular situation.

Contact Us with your questions. A GEBA representative will send you a full summary plan description upon your request.

NOTE: The information presented is only of a general nature and may omit many details and special rules. Accordingly, it cannot be regarded as legal or tax advice. We always recommend that you contact a tax expert regarding your individual situation.

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