What Is a Roth IRA?
And is It Right for You?
Last Published - Wed, May 7 2025
- How It Works
You contribute post-tax income, and your money grows tax-free. When you retire, qualified withdrawals (including earnings) aren’t taxed. - Contribution Limits
As of 2025, the contribution limit is $7,000 ($8,000 if you're 50 or older). Income limits apply, so high earners may be restricted or ineligible. - Ideal for Younger Workers
If you're early in your career and expect your income to rise over time, paying taxes now (at a lower rate) and withdrawing tax-free later can be a smart move. - Flexibility
You can withdraw your original contributions (but not earnings) at any time without penalties, making it more flexible than other retirement options. - Tax Diversification
A Roth IRA can complement a traditional 401(k) or IRA, providing more control over your tax situation in retirement.
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