Massachusetts Roth IRA

Massachusetts Roth IRA funds are highly sought after by a lot of different people that live in this area. In order to find out if you should take part in one of these accounts, you need to first find out what a Roth IRA plan is and what it has to offer you. To put it simply, these kinds of accounts are an individual retirement fund that you pay into from your own personal money. This way you will have a Massachusetts account that you have set up and paid into for many years for when you retire. Then when you are ready to retire, you will have an entire Massachusetts Roth IRA set up that you can draw money to live on from.

General Aspects of an Account

One of the best parts about using a Massachusetts Roth IRA for your retirement fund is that the money that you pull from it will be tax free. This means that even though you will be using your fund for your income after you have stopped working, you will not have to pay any kind of tax like a MA income tax on it. However, one concern that people have about getting a Roth IRA is if they were to pass away before they get to retirement age. Many Massachusetts residents want to make sure that if they contribute to this fund but are not able to use it that their family will be able to get at the funds without a problem.

Beneficiary Regulations

The most common type of person that is a beneficiary for a Massachusetts Roth IRA is a spouse. The process and regulations that are in place for a spouse to become the account holder of a deceased person's Roth IRA is very easy. The deceased person's funds are just transferred directly over to the remaining spouse. The best part about having this kind of Massachusetts account is that the spouse will actually be able to roll over the funds of the deceased person's account into their own account, and there will be no penalty that is involved with the roll over. This is one of the main reasons that people like to get a Massachusetts Roth IRA before they get any other kind of retirement fund account.

If the account holder is not married but has listed someone as a beneficiary, then the funds for that Massachusetts Roth IRA will go to the person that is specified. However, because the account holder and the beneficiary were not married there will be some more regulations that will be come along with the transfer of funds. First, the person that is the beneficiary of the MA account will not be allowed to make any kind of contributions to the account. They will also not be able to roll over the deceased person's Roth IRA into their own account if they happen to have one. There are a couple of ways for the beneficiary of the Massachusetts account to receive the funds. They may either get the full amount five years after the account has transferred, or they may get a portion of the funds over the entire lifetime of the beneficiary.

The Five Year Rule

With any Massachusetts Roth IRA that someone inherits, there is one particular rule that will have to be enforced on the person that becomes the new owner of the account. This rule is known as the five year withdrawal rule. This particular rule with a Roth IRA states that the account must be in existence for at least five years with the person that opened the account. If something happens and the original Massachusetts account holder passes away before this five year period is up, then the person that inherits the account will have to pay income taxes on the funds in the account. This does not include the money that was originally put in the account, but the money that the account has earned in the short time it has been opened. The tax for this only will come when the new owner withdrawals money from the Massachusetts Roth IRA, and since the fund has not been open long, the tax should not be too expensive.

One of the biggest problems that people have with putting their money into a Massachusetts Roth IRA is that they wonder what will happen to all of the money they have saved away in it if they were to pass away. Luckily, this is one the best parts about this kind of MA account. With the Roth IRA, there are only a few regulations that are put on certain beneficiaries, but for the most part, this kind of Massachusetts account is going to make it easy for the new owner to receive the funds from the inheritance.

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Did you Know?

The Roth IRA is a retirement account that is funded with post-tax income. You pay taxes on your income this year as you would during any year and invest the funds in the Roth. Since taxes have been paid before investing you never pay income taxes on those funds in the future.

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Advisors In massachusetts

Julian Morris, CFP, ChFC, AAMS , CRPC , CFS
Julian Morris, CFP, ChFC, AAMS , CRPC , CFS
346 Commercial Street
Boston, MA 02109

Brian Eddy
Brian Eddy
122 Main Street, 2nd Floor
Gloucester, MA 01930

Tom Fisher CFP
Tom Fisher CFP
2000 Westpark Drive
Suite 125
Westborough, MA 01581

Fredric Weldon, CFA
Fredric Weldon, CFA
550 Cochituate Road
East Wing, Floor 4, Suite 25
Framingham, MA 01701

Christopher Grande, MSIM, RMA
Christopher Grande, MSIM, RMA
90 Concord Ave
3rd Floor
Belmont, MA 02478

Jonathan Pierce
Jonathan Pierce
15 Caswell Lane
Plymouth, MA 02360

Annette M Crowley CRPC®, LUTCF®
Annette M Crowley CRPC®, LUTCF®
57 West Bat Rd
Osterville, MA 02655

Jim Furlong
Jim Furlong
601 North Main Street
East Longmeadow, MA 01028