A retirement account funded with after-tax dollars, where qualified withdrawals in retirement are tax-free.
Because contributions are made after tax, both the growth and qualified withdrawals from a Roth IRA are tax-free, provided the account has been open at least five years and withdrawals begin after age 59½. Roth IRAs have annual contribution limits and income eligibility limits set by the IRS, which can change yearly.
Not to be confused with: A Traditional IRA, which is funded pre-tax and taxed on withdrawal instead.
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