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Roth IRA Features


Tax Deductibility

Roth IRA contributions are not tax-deductible.


You can contribute $5,500 to a Roth IRA for any year in which your adjusted gross income (AGI) is less than $112,000. If AGI falls between $112,001 and $127,000, your ability to contribute to a Roth IRA is phased out gradually. Individuals with an AGI higher than $127,000 generally may not open a Roth IRA.

Spousal Considerations

If you are married and your spouse either earns no income, or elects to be treated as having no taxable income for the year, you may make contributions to a separate Roth IRA under your spouse's name. You may contribute up to $5,500 to your spouse's Roth IRA, this is in addition to the $5,500 you may still contribute to your own IRA. Contributions to your IRA and your spouse’s IRA may not exceed 100% of compensation or $11,000, whichever is less.

Married couples filing joint tax returns may contribute to a Roth IRA as long as their combined AGI is $178,000 or less. If your AGI falls between $178,001 and $188,000 your ability to contribute to Roth IRA is phased out.

Time of Contributions

You may make contributions to your Roth IRA at any time up to and including the due date for filing your tax return, not including extensions.


Contributions are allowed even after age 70½, if you are still employed.

Contributing to a Saturna Roth IRA

All contributions to your Saturna Roth IRA must be made in cash. Securities or other assets cannot be contributed to an IRA, but may be converted to cash and then contributed. No part of your contribution may be invested in life insurance contracts or mixed with other property.


Age of Withdrawal

You may withdraw any money you contribute (not earnings) tax-free at any age. Once you are over the age of 59½ and have established your Roth IRA for five years or more, you may withdraw contributions and earnings tax-free. There is no age at which you must begin taking required minimum distributions.

Please use Saturna's IRA Distribution Form to make withdrawals from your IRA account.

Method of Distribution

You have several choices for payment of distributions from your IRA. You may change the method of distribution after payments have begun, so long as the minimum distribution requirements are satisfied.

  • A lump sum payment of your entire account.
  • Monthly, quarterly or annual payments for a period not exceeding your life expectancy or the combined life expectancy of you and your spouse or designated beneficiary.
  • A lump sum payment of part of your account, with the balance either to be paid in installments or used to purchase an Individual Retirement Annuity.
  • In the form of an Individual Retirement Annuity. You may request that the balance of your account be used to purchase a single-premium annuity contract which qualifies as an Individual Retirement Annuity.
    If you don’t request a method of payment before the end of the taxable year in which you reach age 70½, we will make a lump-sum payment.

Installment payment amounts are determined by dividing your IRA balance at the beginning of each year by the number of installments chosen less the number of installments already paid.

Tax on Withdrawal

Once you pass age 59½, all withdrawals from a Roth IRA established for more than five years are tax-free. The earnings will be subject to regular income taxes if you have not held your account for more than five years. In the case of the latter, unless you elect in writing not to have federal (and possibly state) income taxes withheld by completing a Form W-4P and returning it to Saturna, the IRS requires Saturna to withhold 10% of any taxable Roth IRA distributions which total over $200 in a calendar year.

Early Withdrawals: Exemptions and Penalties

The right to withdraw earnings money from a Roth IRA before age 59½ is restricted. In all early withdrawals of earnings, you must add the amount of the early withdrawal to your gross income. You may withdraw your contributions at any time, tax-free.

Penalties on Early Withdrawals

Accumulated earnings withdrawn before reaching the age of 59½, regardless of how long your Roth IRA has been established, generally will be taxable and subject to a 10% penalty tax, normally levied on early withdrawals.

Exemptions from Penalties

There are situations in which early withdrawal penalties do not apply. Ordinary income tax on the early withdrawal, however, will still apply to earnings. Exemptions from penalties for early withdrawal are the same for Roth and Traditional IRAs with a few exemptions. Please see the List of Exemptions.