Roth IRA
A retirement account where contributions are taxed now but withdrawals in retirement are tax-free.
Roth IRAs are funded with after-tax dollars, meaning you pay income tax on contributions today. The advantage is that all growth and withdrawals in retirement are completely tax-free — no taxes on decades of compound growth. The 2026 contribution limit is $7,000 ($8,000 if 50+). Income limits apply: single filers earning above $161,000 and married filers above $240,000 cannot contribute directly but can use the backdoor Roth strategy.
Roth vs Traditional IRA
Choose Roth if you expect your tax rate to be higher in retirement than it is now (younger workers, early career). Choose Traditional if your tax rate is high now and will be lower in retirement. When in doubt, Roth is usually the safer bet because tax-free growth over 30+ years is extremely valuable, and future tax rates are unpredictable.
Try it yourself:
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