The Roth IRA income limit refers to the amount of money you can earn as income before the maximum annual Roth IRA contribution begins to gradually decrease. The five-year Roth IRA rule states that you can't withdraw your earnings tax-free until at least five years after you've first contributed to a Roth IRA. Every year you make a contribution to the Roth IRA, the custodian or trustee will send you Form 5498 with information about IRA contributions. While traditional IRAs and Roth 401 (k) plans legally require RMDs, they are not required for Roth IRAs.
If your spouse has a 401 (k) plan or another work plan and you exceed the IRA's income limits, you can't deduct contributions to a traditional IRA. The annual IRA contribution limit is the maximum amount of contributions you can make to an IRA in a year. Under certain conditions, Roth IRAs also allow tax-free earnings to be withdrawn, which are subject to taxation in a traditional IRA. You can contribute after-tax money to the traditional IRA and then use the clandestine Roth IRA mentioned above to convert the traditional IRA into a Roth IRA.
Converting to a Roth IRA from a taxable retirement account, such as a 401 (k) plan or a traditional IRA, has no impact on the contribution limit; however, making a conversion increases the MAGI and may cause or increase the phasing out of the Roth IRA contribution amount. You may be able to get around income limits by converting a traditional IRA to a Roth IRA, which is called a clandestine Roth IRA. Nor are you required to withdraw from your Roth IRA for as long as you live if you don't want to, making Roth IRAs quite valuable estate planning tools. The distribution of an IRA or the minimum required distribution is the amount that the IRS requires you to withdraw from your IRA once you turn 72.