Roth IRA
RetirementGlossary term
Definition
A retirement account where contributions are made with after-tax dollars, but qualified withdrawals in retirement are tax-free. Particularly beneficial for younger investors.
Related terms
- Traditional IRAA retirement account with tax-deductible contributions (if eligible) and tax-deferred growth. Withdrawals in retirement are taxed as ordinary income. RMDs required at age 73.
- 401(k)A tax-advantaged retirement savings plan offered by employers that allows employees to contribute a portion of their salary before taxes. Many employers offer matching contributions up to a certain percentage.
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