Roth IRA

A Roth IRA is an individual retirement account that allows you to invest after-tax dollars, meaning you pay taxes on the money before you contribute it. The primary benefit of a Roth IRA is that your money grows tax-free, and qualified withdrawals in retirement are also tax-free. This can be particularly advantageous if you expect to be in a higher tax bracket when you retire. Other benefits include the ability to withdraw contributions (but not earnings) at any time without penalty, and no required minimum distributions (RMDs) during the account owner's lifetime.