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A Roth IRA is an individual retirement account (IRA) that allows qualified withdrawals on a tax-free basis provided certain conditions are satisfied. Established in 1997, it was named after William Roth, a former Delaware Senator.1


Roth IRAs are similar to traditional IRAs, with the biggest distinction between the two being how they’re taxed. Roth IRAs are funded with after-tax dollars; the contributions are not tax-deductible. But once you start withdrawing funds, the money is tax-free. Conversely, traditional IRA deposits are generally made with pretax dollars; you usually get a tax deduction on your contribution and pay income tax when you withdraw the money from the account during retirement.2

This and other key differences make Roth IRAs a better choice than traditional IRAs for some retirement savers.



You can withdraw contributions you made to your Roth IRA anytime, tax- and penalty-free. (all in italics)

However, you may have to pay taxes and penalties on earnings in your 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.

  • Roth IRAs are best when you think your taxes will be higher in retirement than they are right now.

  • You can't contribute to a Roth IRA if you make too much money. In 2021, the limit for singles is $140,000. For married couples, the limit is $208,000.3

  • The amount you can contribute changes periodically. In 2021, the contribution limit is $6,000 a year unless you are age 50 or older—in which case, you can deposit up to $7,000.3

  • Almost all brokerage firms, both physical and online, offer a Roth IRA. So do most banks and investment companies.


What about the Secure Act?

The Secure Act is one of the most dynamic changes retirement legislation since the Pension Protection Act of 2006, and addresses a wide variety of retirement planning topics.


Dated -This video is still very informative on the impact of the Secure Act.