What Is a Roth IRA? A Plain-English Guide
A Roth IRA is an individual retirement account funded with after-tax money. Contributions are not generally deductible, but qualified withdrawals can be tax-free. Eligibility and contribution limits depend on current IRS rules.
Why people use Roth IRAs
A Roth IRA can provide tax diversification: you pay tax before contributing, then may withdraw qualified money without federal income tax. The account can also provide flexible access to contributions, although earnings have separate rules and exceptions.
Roth IRA vs Traditional IRA
A Traditional IRA may provide a deduction today when you qualify, while a Roth IRA generally offers tax-free qualified withdrawals later. The better fit depends on current and expected future tax rates, eligibility, and how you value flexibility. Use the Roth vs Traditional comparison to model one scenario.
Eligibility and limits
Roth IRA contribution eligibility is limited by modified adjusted gross income, and annual contributions are subject to an IRS limit shared with Traditional IRA contributions. These figures change, so use current IRS guidance rather than an old article or screenshot.
Qualified withdrawals
Qualified Roth IRA distributions generally require satisfying the applicable age and five-year rules. Contributions and earnings do not receive identical treatment. The IRS rules are detailed, so a calculator should not replace tax advice for a real withdrawal or conversion.
Frequently asked questions
Are Roth IRA contributions tax-deductible?
Generally no. Roth IRA contributions are made with after-tax money. The potential benefit is tax-free treatment for qualified withdrawals.
Can I withdraw Roth IRA contributions?
Roth IRA contributions generally have different withdrawal treatment from earnings, but ordering rules and exceptions matter. Confirm the current IRS rules for your situation.
Is a Roth IRA better than a 401(k)?
Neither is always better. A 401(k) may offer an employer match and higher contribution limits, while a Roth IRA may offer a broader investment choice and different tax treatment.
Sources
Gleefund explains general retirement-account concepts and provides estimates. It does not provide financial, tax, or legal advice. See our disclaimer and methodology. Check the current IRS rules before acting.
Figures current as of 2026-09-25. Found an error? Contact us.