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Roth IRA
(Tax-Free Retirement Account)
A Roth IRA is a retirement account funded with post-tax dollars, allowing tax-free withdrawals after age 59½ if held for 5+ years. Contributions ($6,500/year in 2023; $7,500 if 50+) aren’t tax-deductible, but earnings grow tax-free.
Unlike traditional IRAs or 401ks, Roth IRAs have no required minimum distributions (RMDs), making them ideal for estate planning. Income limits apply (e.g., phase-out starts at $138,000 for single filers in 2023). Early withdrawals of contributions (not earnings) are penalty-free, offering flexibility. The SEC recommends Roth IRAs for young investors in lower tax brackets expecting higher future taxes.
Unlike traditional IRAs or 401ks, Roth IRAs have no required minimum distributions (RMDs), making them ideal for estate planning. Income limits apply (e.g., phase-out starts at $138,000 for single filers in 2023). Early withdrawals of contributions (not earnings) are penalty-free, offering flexibility. The SEC recommends Roth IRAs for young investors in lower tax brackets expecting higher future taxes.