As a financial advisor, you know the Roth IRA provides a number of benefits to clients saving for retirement, including tax-free growth, no required minimum distributions for those age 70½ and older, and the option to continue contributions beyond the age of 70½ (if income is still being earned). But in order for your clients to reap these benefits, it’s essential that you maintain an understanding of the rules of Roth IRA contributions, as there are a number of penalties your clients could face if their accounts are not carefully monitored. Below, I will discuss two common Roth IRA pitfalls, as well as how best to avoid them.

If you’re in the retirement plan space, here’s a scenario you might be familiar with: After careful consideration, your clients—small business owners—decide that the traditional IRA they’ve been using no longer meets the retirement goals of their employees. They are looking to establish a more significant retirement plan and call you to learn what options are available. After meeting, together you determine that a SIMPLE IRA plan is the ideal choice in terms of cost and maintenance. But now comes the hard part: finding the right SIMPLE IRA plan for your clients.