Roth IRA

Full explanation

A Roth IRA is funded with after-tax dollars — you get no deduction when you contribute, but qualified withdrawals in retirement are 100% tax-free (including all investment growth). For 2026: contribution limit is $7,000 ($8,000 if age 50+). Income limits apply — the ability to contribute phases out at MAGI of $150,000-$165,000 (single) and $236,000-$246,000 (married filing jointly). Unlike traditional IRAs, Roth IRAs have no required minimum distributions (RMDs) during the owner's lifetime. Contributions (not earnings) can be withdrawn anytime without tax or penalty. For tax-free withdrawal of earnings, the account must be 5+ years old and you must be 59.5+.

Source: IRS Publication 590-A — Contributions to IRAs