What's a key difference between a Roth IRA and a traditional IRA?

With a Roth IRA, you always contribute after-tax dollars and make potentially tax-free withdrawals in retirement. With a traditional IRA, your contributions may be tax deductible. Taxes are deferred until you make withdrawals.

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Roth IRA

Q: What is my contribution limit for a Roth IRA?

You may be eligible to contribute up to $7,000 per year ($8,000 if you are 50 or older).

Q: What are the advantages of a Roth IRA?

Contributions are subject to regular federal and state income taxes. Earnings are tax-free if withdrawn after age 59 1/2 and your account has been open for at least five years. This is true for both federal and in most cases state income taxes. Contributions (not earnings) can be withdrawn tax-free at any time. And there is no required minimum distribution if you are the original account owner.

Q: What are the contribution limits?

Contributions must be made prior to each year's tax return deadline for the corresponding year - typically April 15th. For each year during which you are age 50 or older, you can make an additional catch up contribution. Be aware of the potential penalties if you exceed your IRA contribution limits .

Q: What investment choices will I have?

At Merrill, you'll have access to a full range of investment choices. Select from a wide array of stocks, bonds, options, ETFs, well-known mutual funds and managed portfolios. You may also consider investing in a Money Market IRA or Featured CD IRA offered through Bank of America, N.A.

Q: Are there any fees associated with a Roth IRA?

Your Merrill Edge Self-Directed Roth IRA has unlimited $0 online stock, ETF and option trades with no trade or balance minimums. Options contract and other fees may apply. See pricing for details .

Q: How can I convert to a Roth IRA?

To convert to a Roth IRA, call us at 888.637.3343 for assistance, and we'll guide you every step of the way. We can help you understand your choices to convert any type of retirement account. For a Traditional IRA at Bank of America or Merrill, we will help you open a Roth IRA and fill out the conversion form. Here's what you'll need to convert to a Roth IRA. Social Security number and date of birth A valid mailing and email address Employment information, including company name, address and start date General financial information, such as annual income and household net worth Names and dates of birth for any beneficiaries

Let your earnings
grow tax-free

Open an account with Merrill

Avoid paying income tax on qualified withdrawals

Roth IRA Benefits

Item 1 of 4: Contribute using your after‑tax dollars

Item 2 of 4: Enjoy potentially tax-free growth for your assetsFootnote ¹

Item 3 of 4: Make withdrawals without paying income tax

Item 4 of 4: Invest in stocks, mutual funds, ETFs and more

Q&A

What is my contribution limit for a Roth IRA?

You may be eligible to contribute up to $7,000 per year, $8,000 if you're over 50.Footnote ²

What's a key difference between a traditional and a Roth IRA

With a traditional IRA your contributions may be tax deductible. Taxes are deferred until you make withdrawals. With a Roth IRA, you always contribute after-tax dollars and make potentially tax-free withdrawals in retirement.

Learn more about IRAs at Merrill

Retirement Account Selector

Which retirement account is right for you?

Compare the features of retirement accounts available at Merrill, find out which ones you're eligible for and learn about details like contribution limits and potential tax advantages.

Try our tool to compare retirement accounts at Merrill

IRA Conversion Calculator

Interested in a Roth IRA conversion?

You may be able to convert your account to a Roth IRA. Accounts eligible for a Roth IRA conversion include:

Traditional IRA
SEP IRA
SIMPLE IRAFootnote ³
Other tax-qualified retirement plans such as 401(k)s, 403(b)s and 457(b)sFootnote ⁴

Interested but not sure where to start? Use our online calculator to find out if a conversion is right for you.

See what else your Merrill account has to offer

Item 1 of 3: Explore a Traditional IRA account

A traditional IRA allows you to make contributions using pre-tax dollars and defer taxes until you make qualified withdrawals in retirement.Footnote ²

Learn more about Traditional IRAs at Merrill

Item 2 of 3: Rollover to a Merrill IRA

You can roll over to an IRA, convert to a Roth IRA, roll over to your new employer, take a distribution, or leave the account where it is.Footnote ⁵

Learn more about your choices at Merrill

Item 3 of 3: Decide how you want to invest

Make your own investments or have Merrill investment professionals manage your portfolio for you, with the option to work with an advisor.

Compare your options at Merrill

Merrill Guided Investing Bonus Offer

Get started with Merrill Guided Investing and pay $0 in program fees for 6 months.

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Footnote *Conditions and other fees apply

Discover your investment choices

Find the investments that work for your portfolio, whether you're interested in trading stocks, ETFs, mutual funds or fixed income investments.

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Merrill offers transparent pricing for trades, account services and investment advisory programs.
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Frequently Asked Questions

Expand all

What are the advantages of a Roth IRA?

Contributions are made with after-tax dollars that have been subject to regular federal and state income taxes.
Earnings are tax-free if withdrawn after age 59½ and and at least 5 years have passed since your first Roth IRA contribution. This is true for both federal and in most cases state income taxes.Footnote ¹
Contributions (not earnings) can be withdrawn tax-free at any time. And there is no required minimum distribution if you are the original account owner.

Am I eligible for a Roth IRA?

Anyone can open and contribute to a Roth IRA as long as your modified adjusted gross income (your AGI after deductions) meets federal guidelines (PDF).
If you are covered by an employer-sponsored plan like a 401(k) or 403(b), you are still eligible to open a Roth IRA as long as you meet the eligibility requirements above and you have earned income at least equal to your contribution amount.
If you have no earned income but your spouse earns enough income to cover your contribution as well as their own, and their income (AGI) does not exceed the limits above, you can contribute to a Roth IRA account.
There's no limit to the number of individual retirement accounts (IRAs) you can own.

What are the contribution limits?

What investment choices will I have?

Are there any fees associated with a Roth IRA?

How can I convert to a Roth IRA?

To convert to a Roth IRA, call us at 888.637.3343 for assistance, and we'll guide you every step of the way. We can help you understand your choices.Footnote ⁶

For a Traditional IRA at Bank of America or Merrill, we will help you open a Roth IRA and fill out the conversion form. Here's what you'll need to convert to a Roth IRA.

Social Security number and date of birth
A valid mailing and email address
Employment information, including company name, address and start date
General financial information, such as annual income and household net worth
Names and dates of birth for any beneficiaries

Footnote asterisk

Other fees may apply. Sales of ETFs are subject to a transaction fee of between $0.01 and $0.03 per $1,000 of principal. There are costs associated with owning ETFs and mutual funds. To learn more about Merrill pricing, visit our Pricing page.

Footnote ¹ There is a single, 5-year holding period when determining whether earnings can be withdrawn federal (and, in most cases, state) income tax-free as part of a qualified distribution from a Roth IRA. This period begins January 1 of the year of the first contribution to any Roth IRA account.

Footnote

Contribution and compensation limits are subject to a cost-of-living adjustment annually pursuant to the Internal Revenue Code. Contribution and compensation limits for subsequent years may vary.

Footnote ³ After two years of participation.

Footnote ⁴ Must be eligible for a withdrawal from the plan.

Footnote ⁵ These options are available if you terminate employment and have a pre-tax balance in your former employer's qualified retirement plan. Options to leave funds in plan or roll over to your new employer's plan may not be available in certain circumstances.

Footnote

You have choices about what to do with your 401(k) or other type of plan-sponsored accounts. Depending on your financial circumstances, needs, goals and employer plan terms, you may choose to roll over to an IRA or convert to a Roth IRA, roll over a 401(k) from a prior employer to a 401(k) at your new employer, take a distribution, or leave the account where it is. Each choice may offer different investments and services, fees and expenses, withdrawal options, required minimum distributions, tax treatment (particularly with reference to employer stock), and provide different protection from creditors and legal judgments. These are complex choices and should be considered with care. For more information visit our rollover page or call Merrill at 888.637.3343.

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Investment products offered through MLPF&S and insurance and annuity products offered through MLLA:

Are Not FDIC Insured	Are Not Bank Guaranteed	May Lose Value
Are Not Deposits	Are Not Insured by Any Federal Government Agency	Are Not a Condition to Any Banking Service or Activity

Investing in securities involves risks, and there is always the potential of losing money when you invest in securities.

Asset allocation, diversification, and rebalancing do not ensure a profit or protect against loss in declining markets.

Merrill, its affiliates, and financial advisors do not provide legal, tax, or accounting advice. You should consult your legal and/or tax advisors before making any financial decisions.

This material is not intended as a recommendation, offer or solicitation for the purchase or sale of any security or investment strategy. Merrill offers a broad range of brokerage, investment advisory (including financial planning) and other services. Additional information is available in our Client Relationship Summary (PDF).

Merrill Lynch, Pierce, Fenner & Smith Incorporated (also referred to as "MLPF&S" or "Merrill") makes available certain investment products sponsored, managed, distributed or provided by companies that are affiliates of Bank of America Corporation ("BofA Corp."). MLPF&S is a registered broker-dealer, registered investment adviser, Member Securities Investor Protection (SIPC) popup and a wholly owned subsidiary of Bank of America Corporation ("BofA Corp.").

Merrill Lynch Life Agency Inc. (MLLA) is a licensed insurance agency and wholly owned subsidiary of BofA Corp.

Banking products are provided by Bank of America, N.A. and affiliated banks, Members FDIC and wholly owned subsidiaries of Bank of America Corporation.

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Unlimited $0 Trades

With Merrill Edge Self‑Directed, get unlimited free online stock, ETF and option trades with no trade or balance minimumsFooter footnote ^b

Options contracts and other fees may applyFooter footnote ^a

Open an account with Merrill Edge Self-Directed

Footer footnote
Other fees may apply. Free and $0 means there is no commission charged for these trades. $0 option trades are subject to a $0.65 per-contract fee. Sales are subject to a transaction fee of between $0.01 and $0.03 per $1,000 of principal. There are costs associated with owning ETFs. To learn more about Merrill pricing, visit our Pricing page.
Footer footnote

Merrill waives its commissions for all online stock, ETF and option trades placed in a Merrill Edge^® Self-Directed brokerage account. Brokerage fees associated with, but not limited to, margin transactions, special stock registration/gifting, account transfer and processing and termination apply. $0 option trades are subject to a $0.65 per-contract fee. Other fees and restrictions may apply. Pricing is subject to change without advance notice.

For broker-assisted trades through Merrill Edge, you will be charged a fee equal to the lower of $29.95 or 5.00% of the principal amount of the transaction. Further, there are indirect fees, such as annual management and other similar fees, that are charged by the manager or sponsor of an exchange-traded fund and of a closed-end fund, as disclosed in the product's prospectus.

Investment products offered through Merrill Lynch, Pierce, Fenner & Smith Incorporated, and insurance and annuity products offered through Merrill Lynch Life Agency Inc.:

Are Not FDIC Insured

Are Not Bank Guaranteed

May Lose Value

Are Not Deposits

Are Not Insured by Any Federal Government Agency

Are Not a Condition to Any Banking Service or Activity

Investing in securities involves risks, and there is always the potential of losing money when you invest in securities.

Asset allocation, diversification, and rebalancing do not ensure a profit or protect against loss in declining markets.

The performance data contained herein represents past performance which does not guarantee future results. Investment return and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance quoted. For performance information current to the most recent month end, please contact us.

Net Asset Value (NAV) returns are based on the prior-day closing NAV value at 4 p.m. ET. NAV returns assume the reinvestment of all dividend and capital gain distributions at NAV when paid.

Market price returns are based on the prior-day closing market price, which is the average of the midpoint bid-ask prices at 4 p.m. ET. Market price returns do not represent the returns an investor would receive if shares were traded at other times.

Returns include fees and applicable loads. Since Inception returns are provided for funds with less than 10 years of history and are as of the fund's inception date. 10 year returns are provided for funds with greater than 10 years of history.

Before investing consider carefully the investment objectives, risks, and charges and expenses of the fund, including management fees, other expenses and special risks. This and other information may be found in each fund's prospectus or summary prospectus, if available. Always read the prospectus or summary prospectus carefully before you invest or send money. Prospectuses can be obtained by contacting us.

Expense Ratio – Gross Expense Ratio is the total annual operating expense (before waivers or reimbursements) from the fund's most recent prospectus. You should also review the fund's detailed annual fund operating expenses which are provided in the fund's prospectus.

Merrill, its affiliates, and financial advisors do not provide legal, tax, or accounting advice. You should consult your legal and/or tax advisors before making any financial decisions.

Banking products are provided by Bank of America, N.A. and affiliated banks, Members FDIC and wholly owned subsidiaries of Bank of America Corporation ("BofA Corp.").

Merrill Lynch Life Agency Inc. ("MLLA") is a licensed insurance agency and wholly owned subsidiary of BofA Corp.

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Roth IRA

Let your earnings grow tax-free

Avoid paying income tax on qualified withdrawals

Roth IRA Benefits

What is my contribution limit for a Roth IRA?

What's a key difference between a traditional and a Roth IRA

Retirement Account Selector

Which retirement account is right for you?

Item 1 of 3: I am an employee

Item 2 of 3: I am self-employed

Item 3 of 3: I am a business owner

IRA Conversion Calculator

Interested in a Roth IRA conversion?

See what else your Merrill account has to offer

Item 1 of 3: Explore a Traditional IRA account

Item 2 of 3: Rollover to a Merrill IRA

Item 3 of 3: Decide how you want to invest

Get started with Merrill Guided Investing and pay $0 in program fees for 6 months.

Discover your investment choices

Ready to get started?

Frequently Asked Questions

What are the advantages of a Roth IRA?

Am I eligible for a Roth IRA?

What are the contribution limits?

What investment choices will I have?

Are there any fees associated with a Roth IRA?

How can I convert to a Roth IRA?

I'd Like to

Discover Merrill

Contact Us

Unlimited $0 Trades

Let your earnings
grow tax-free