What is a Roth IRA?

A Roth IRA is an individual retirement account in which money grows tax-free; Roth IRA withdrawals in retirement are also tax-free. Savers at least 59½ years old and who hold their accounts for at least five years can take distributions, including earnings, without paying federal taxes. You open a Roth IRA at a brokerage or bank, then select what you want to invest in, such as mutual funds, stocks, bonds, exchange-traded funds (ETFs) or bank savings products.

Advantages of a Roth IRA:
– Easy withdrawals
– Double dipping
– Flexible timing
– Extra time to contribute
– Tax-free distributions
– No age limit to open
– No RMDs.

Bottom Line
Regardless of the type of account you go with, spend some time comparing different IRAs and their various pros and cons. In the end, this will help you choose the account that’s best suited to your financial needs. Think about working with a financial advisor if you still find yourself having trouble planning your retirement.

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