The Roth IRA was created to let you earn retirement money tax-free on your investments.
A Roth IRA enables you to make nondeductible contributions into a retirement account whose earnings grow tax-free and can be withdrawn tax-free at retirement, because the contributions are made with after-tax dollars. In contrast, traditional IRA earnings, which are made with pre-tax dollars, are taxed when withdrawn.
Roth IRA benefits
- Tax-free growth. Earnings within your account will not be taxed when you take qualified distributions.
- No annual distribution requirements. Unlike a Traditional IRA, you are not required to take distributions from your Roth IRA after age 70 ½.
- Flexible contributions. You can keep contributing after retirement (beyond age 70½), as long as you have earned income.
- A wide variety of options from which to choose to meet your individual needs.