A Roth IRA is an individual retirement account you fund with after-tax dollars. The money grows tax-free, and qualified withdrawals in retirement are completely untaxed. Roth IRAs also have no required minimum distributions during the owner's lifetime.
Roth contributions make the most sense when you expect your tax rate to be higher in retirement than it is today. Eligibility to contribute directly phases out at higher incomes.
Related terms: 401(k) · Capital Gains