A Roth IRA is a type of individual retirement account in which you can invest after-tax dollars and receive tax-free growth and withdrawals. The main advantage of a Roth IRA over a traditional IRA is that you can withdraw funds without paying taxes on your contributions and earnings once you retire.

A Roth IRA (Individual Retirement Account) is a tax-advantaged savings account designed for retirement. Contributions to a Roth IRA are made with after-tax income, meaning you don’t get a tax deduction upfront. However, qualified withdrawals in retirement, including both contributions and earnings, are tax-free.

Roth IRAs are ideal for individuals who expect to be in a higher tax bracket later in life. They offer flexibility, as contributions (but not earnings) can be withdrawn at any time without penalties. The account has income eligibility limits and annual contribution caps set by the IRS.

Unlike traditional IRAs, Roth IRAs have no required minimum distributions (RMDs), making them a powerful tool for long-term, tax-free growth and estate planning.