What is a Roth IRA? Website

“Roth IRAs are a great, tax-efficient way to save for your retirement.”

Resource Details

When

Anytime

Where

Online

Cost

Free

Program Rating

Want to leave a review?

Sign Up Today
  • Star Filled In Star Half Star
  • Star Filled In Star Half Star
  • Star Filled In Star Half Star
  • Star Filled In Star Half Star
  • Star Filled In Star Half Star
Description

This website tells you: What Is A Roth IRA?

A Roth IRA is a special retirement account where you pay taxes on money going into your account and then all future withdrawals are tax free.

Like beauty, the benefit of a Roth IRA is in the eye of the beholder and it all depends on the beholder’s tax bracket–both now and when he or she retires.

Although there is no up-front tax deduction for Roth IRA contributions as there is with a traditional IRA, Roth distributions are tax-free when you follow the rules. And because every penny you stash in a Roth IRA is your money—not a tax-subsidized gift from Uncle Sam—you can tap your contributions (but not your earnings) any time tax-free and penalty-free.

Roth IRAs make the most sense if you expect your tax rate to be higher during retirement than your current rate. That makes Roth IRAs ideal savings vehicles for young, lower-income workers who won’t miss the upfront tax deduction and who will benefit from decades of tax-free, compounded growth. Roth IRAs also appeal to anyone who wants to minimize their tax bite in retirement as well as older, wealthier taxpayers who want to leave assets to their heirs tax-free.

You can contribute to a Roth IRA at any age as long as you have earned income from a job. That means they are appropriate for everyone from child actors to septuagenarian Wal-Mart greeters.

Related Resources