After-tax individual retirement account designed for tax-free qualified withdrawals later in retirement.
A Roth IRA is a U.S. individual retirement account funded with after-tax money, with qualified withdrawals generally coming out tax-free later.
It is the clearest contrast to a Traditional IRA, because the main decision is whether the saver prefers to pay tax now or later.
Roth IRAs matter because they separate retirement saving from future tax exposure.
contributions are generally not deductible
investment growth can accumulate inside the account without annual tax drag
qualified retirement withdrawals are usually tax-free
That makes the Roth structure especially useful when a saver expects higher future tax rates or wants more tax flexibility in retirement.
IRA: The broader account category that includes Roth and Traditional variants.
Traditional IRA: The main tax-deferred alternative to a Roth IRA.
401(k) Plan: Another retirement wrapper that can sometimes offer Roth treatment.
Adjusted Gross Income: Income measure that often affects Roth IRA contribution eligibility.