Roth IRA

A Roth IRA (Individual Retirement Account) is a type of retirement savings account funded with after-tax dollars, meaning contributions are made from income that has already been taxed. Your investments can grow tax-free inside the account, and qualified withdrawals—including both contributions and earnings—are also tax- and penalty-free after age 59½ (provided the account has been open at least five years). Unlike traditional IRAs, Roth IRAs do not provide an immediate tax deduction for contributions, but they offer flexible rules: you may withdraw your contributions at any time without taxes or penalties, and there are no required minimum distributions during your lifetime. There are income limits for eligibility and annual contribution caps, but the account can be used for a wide range of investments through banks, brokerages, and advisors. Roth IRAs are particularly useful for those who expect to be in a higher tax bracket later in life or want tax-free growth and withdrawals in retirement.