Opening a Roth IRA is a smart way to save for retirement. A Roth IRA lets you grow your retirement savings and enjoy tax-free retirement withdrawals.**
Differences Between a Roth IRA and Traditional IRA
Unlike a traditional IRA, contributions made to a Roth IRA cannot be deducted for tax purposes. However, growth achieved through investment returns is free from income tax.
A Roth IRA is more flexible than you think.
If the idea of not being able to use your money until 59 1/2 is holding you back from opening a Roth IRA, you might be surprised to learn that a Roth IRA is more accessible than you realize. You can withdraw your initial contribution to a Roth IRA, but leave all the earnings alone to continue to grow, with no early withdrawal penalty tax or income tax due.
Roth IRA Limits and Requirements
Maximum contribution: $6,000 in a tax year.
Individuals over age 50 may be eligible for an additional $1,000 contribution.
While Roth IRA contributions are not tax-deductible, qualified withdrawals of earnings can be federal income tax-free when certain withdrawal requirements are met.