ROTH IRAs LET YOU HAVE YOUR CAKE AND EAT IT, TOO

This "Financial Focus" column is prepared by Edward Jones Investments, headquartered in St. Louis. Jones includes branches throughout the nation, including Cape Girardeau and Jackson.

Since they were established in 1975, IRAs have become a tremendously popular way to save for retirement. Although IRAs offer tax-deferred growth, some Americans hesitated to jump on the bandwagon because they weren't sure they wanted to defer taxes until retirement.

Now, thanks to the Roth IRA, retirement savers can have their cake and eat it, too. Not only do Roth IRAs allow your savings to grow free of taxes, they also allow tax-free withdrawals in retirement. Distributions from a Roth IRA are tax- and penalty-free if they meet two conditions: (1) the assets have been in the account for five years or more, and (2) the withdrawal is made after age 59 1/2 or for a qualified purpose (death, disability or up to $10,000 for a first home).

People with earned income can contribute up to $2,000 annually to a Roth IRA, as long as their adjusted gross income (AGI) is under certain limits. The following table lists these limits. Those with AGI under the ranges can make full contributions, those with AGI within the ranges can make partial contributions, and those with AGI above the ranges cannot contribute to Roth IRAs.

AGI Limits for Roth IRAs: Single $95,000 to $110,000; Married filing jointly, $150,000 to $160,000.

With Social Security's uncertain future, it's vital for working Americans to have a retirement plan in place. With tax-deferred growth and tax-free retirement income, Roth IRAs can be a vital part of that plan. Consult your financial professional for all the details on this valuable retirement-saving vehicle.

The Southeast Missourian does not recommend that readers buy or sell stocks featured in this column, which is provided for informational purposes only.