retirement
roth ira
A type of Individual Retirement Account where contributions are made with after-tax money but grow and can be withdrawn tax-free.
Example
"Because she was young and in a low tax bracket, a Roth IRA made more sense than a traditional IRA."
💡 Memory Tip
ROTH = pay tax NOW, withdraw tax-FREE later. Traditional IRA is the opposite.
Etymology
Named after Senator William Roth, who championed its creation in the Taxpayer Relief Act of 1997.
Common Misspellings
roth IRARoth iraroth ira accountroth ir
Related Terms
See Also
retirementtax-free