Tax-Deferred Account," also known as an Individual Retirement Account. Roth IRAs are special types of tax-deferred retirement accounts that provide tax-free growth of savings and tax-free distributions on qualified withdrawals. It’s one of the most popular types of retirement accounts available.

Roth IRAs offer a variety of benefits, such as:

• Contributions are made after-tax – Contributions to a Roth IRA are made with after-tax money, meaning you don’t get an immediate tax deduction for your contribution. However, earnings and growth from your contributions grow tax-free — with no taxes or penalties on withdrawals, as long as you follow the conditions for qualified distributions.

• Access to tax-free distributions – Qualified distributions from a Roth IRA are completely tax-free — meaning you don’t have to pay taxes on withdrawals, up to the total contribution, or any gains from the investment.

• Higher contribution limits – When compared to traditional IRAs, contributions to Roth IRAs can be higher, depending on your modified adjusted gross income.

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Article Created by A.I.