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Think you're too old for a Roth IRA? Think Again! - YouTube
Channel: Quest Trust Company
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hey guys it's Juan Deshon here with
quest trust company I'm gonna talk to
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you today about are you too old to have
a Roth IRA so for those of you who don't
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know the Roth IRA is a very very sought
out account right when we talk about it
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we talked about putting after-tax
dollars into a Roth IRA so you can
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invest that money and grow it tax-free
now most of the time individuals setting
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up Roth IRAs are individuals who are
working nine to five jobs and working
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some kind of w2 job or tenant or
self-employed and paying themselves 1099
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whatever it may be but ultimately we
want to put some money away for
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themselves for a retirement all right
and a lot of times weren't whenever
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we're talking about Roth IRAs most
people think it's only for those
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individuals who can start young because
you're only limited to $6,000 a year if
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you're under the age of 50 and $7,000 if
you're over the age of 50
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so someone older may think well this
isn't for me there's just not enough
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money that I can put in to grow it fast
enough and that's where I believe you
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were wrong now before I get into the
solutions I also want to bring up
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another reason why individuals may think
they cannot use the Roth IRA if they're
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over a certain age some individuals may
think that if you are over a certain age
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then you can no longer contribute to a
Roth IRA and that is false no matter
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your age the only qualification for you
to contribute to a Roth IRA is going to
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be that you have what's called earned
income right earned income can come from
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many different sources but as long as
you satisfy that as long as you satisfy
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enough to compensate for the
contribution that you're making then you
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can contribute to what's called a Roth
IRA right so someone who may be 80 years
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old and maybe somewhat retired but
ultimately still has a consulting
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business on the side can pay themselves
earned income and still contribute to
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the Roth IRA now the reason they may
want to do so is for a few different
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reasons one generational wealth right
generational wealth
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if you set up an IRA account
specifically in this case a Roth IRA
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account and you start investing in a
matter of your age and you think you can
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earn some money there you will be
passing down that Roth IRA to your
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beneficiary whether this be your son
your daughter your grandson your
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granddaughter whoever it may be that
individual who possibly inherits your
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Roth IRA will be able to have a ten year
period if they are over the age of
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majority a ten-year period to distribute
those funds completely tax-free to
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themselves as well as continue to invest
that money for those ten years all right
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so think about how that can be extremely
beneficial if you're not necessarily in
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need for the cash right now or the
distribution from the Roth IRA is right
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now why not think about the generational
wealth that you can be building for your
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children and the children of your
children sue if you are an older
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individual who's looking to open up a
Roth IRA and contribute to the plane and
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start investing with your Roth IRA
another reason it may be beneficial for
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you is you've already surpassed the age
limit to take distributions out tax-free
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without penalty in a Roth IRA the only
thing you got to do now if you're
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starting this Roth IRA for the very very
first time and starting from scratch
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don't think you got to do is wait five
years until that Roth IRA has matured
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and now you could take tax-free
distributions out of that Roth IRA right
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after the five years of you establishing
and contributing to it right so let's
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talk about that again if I am a 75 year
old individual and set up a Roth IRA and
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start making my $7,000 contributions
yearly for the next five years as well
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as invested maybe alongside of my other
IRAs or alongside my network of IRA
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account holders I can grow that account
in five years anything I've made in the
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Roth IRA will be tax-free to me that is
tax-free income ultimately for you and
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again going back to other reason for
your generations 3 another thing you
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want to think about is Roth conversions
if you're an individual
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only has pre-tax money in the account
and you have retired and aren't
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receiving an income
well then from what we talked about you
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cannot longer contribute however that
does not mean you cannot have a Roth IRA
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if you are not taking distributions out
of a traditional IRA don't necessarily
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need that kind of income right now then
you could look into taking doing what's
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called a Roth conversion this is taking
some of that pre-tax money and
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converting it to the Roth IRA what
you're ultimately doing is you're
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deciding I'm gonna pay taxes now so I
can continue to make investments inside
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of a Roth IRA and again in five years
from that period of time you can take
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out tax-free distributions this is
beneficial for the individuals who may
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be older because they may be in a lower
tax rate and it's a good time to take
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that tax it on the money that you would
otherwise pay later down the road number
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four
ultimately if you're making
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contributions to your Roth IRA you are
not locking up your money forever right
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if you put some money in a Roth IRA if
you make a contribution let's say of
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seven thousand dollars in a Roth IRA and
then later on find out that you actually
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need that money I call the Roth IRA a
glorified savings account you can take
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out your contributions what we call
basis at any point in time tax-free and
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penalty free right so guys if you're
worried about should I put this Roth
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money in there is it gonna be tied up
for a long time what if I need it
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or Roth IRA allows you to take that
money out completely tax-free and
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penalty free as long as it's coming from
the contributed portion of your Roth IRA
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so guys if you guys have any questions I
want to talk about getting started with
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a Roth IRA despite your age young old
does that matter
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talk to an IRA specialist give us a call
at one eight five five fun IRAs or email
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IRA specialist I quess trust calm and
some like myself or someone on my team
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will be happy to assist you hope to see
you soon thanks
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