New Mexico Roth IRA

New Mexico Roth IRA accounts offer a number of benefits, especially when compared to some of the other more traditional ways to save for retirement. They are tax free; they offer flexible withdrawals; and they can be used towards a trust or inheritance. So if they are so wonderful then why hasn't everyone across the state of New Mexico considered a New Mexico Roth IRA account? The reason is because there are certain qualifications that you need to meet before you will be able to open these IRA retirement accounts.

NM Roth IRAs Eligibility Requirements

The first requirement that you must meet when opening and contributing to a New Mexico Roth IRA account is that the money must be earned through actual work and compensation. What this means is that you cannot place money from inheritance, from the lottery or from spousal maintenance in this fund. The money must be earned from a job and can include tips, wages, bonuses and professional fees.

Another eligibility requirement when it comes to opening a New Mexico Roth IRA is that you need to make below a certain amount. Every year the amount will change a little bit but, in general, the guidelines are as follows: if you make over a gross adjusted income of $122,000, then you will not be able to contribute to a New Mexico Roth IRA. This limit is put in place for single head of household individuals as well as single married individuals that are filing separately due to a separation from your spouse. For married couples filing together, the adjusted income limit is $177,000.

If you are single and make under $107,000 per year, then you are able to contribute $5,000 per year to a New Mexico Roth IRA plan. If you make between $107,000 to $122,000, then there is a phase out limit in place and those over the income barrier of $122,000 will not be able to take out this type of IRA account. For married and joint filings, you can contribute $5,000 per year if you jointly make less than $169,000 and are not eligible to contribute at all if you make over $177,000 together.

There is one additional thing for people in New Mexico that are over the age of 50 and opening up an Roth IRA for the first time. If you are under the standard limits then you will be able to contribute $5,000 as well as an additional $1,000 for a total of $6,000. This is referred to as a 'catch up' contribution and can make it easier to make a little extra money for your retirement through your Roth account.

Investing in IRAs

There are several different ways to save and prepare for retirement. There are special retirement savings accounts as well as employed sponsored programs such as the 401k and 403b plans designed for workers in New Mexico. There are government programs such as Social Security and pension plans that may or may not still be there when you plan on retiring. There are also traditional IRA programs that work with your pre-tax income. However, New Mexico Roth IRA plans are a little different than all of these other options.

New Mexico Roth IRAs work with post tax income. What this means is that when you invest money into your New Mexico account, you have already paid tax on it and thus you don't have to do it again. The money in there is yours to spend as you please. Furthermore, you don't have to wait until a certain day to take out the funds and you don't have a time limit on when you have to start taking out the money like you do with traditional NM IRA plans. These are some of the many reasons why these IRA systems are becoming more and more popular for residents across New Mexico.

Compare Roth IRA Accounts

Keep in mind that there may be other eligibility requirements involved in opening up a New Mexico Roth IRA. It is best to speak with a professional about your options. Comparing NM accounts will give you a better indication of what is out there and can help you prepare for your retirement.

Saving for retirement is not easy and there are a lot of different roads you can take. You may wish to open several different retirement investment plans or you may be happy to just stick to one. Adding a little extra to a New Mexico Roth IRA each year will certainly benefit you in the long run. Whether you are 30, 40, 50 or even 60, it is never too early or too late to start contributing to Roth IRAs. Take the time to learn about your retirement investment options and start preparing for your golden years today!

Roth IRA

Roth IRA