By Ziv Shay | Updated June 2026

Roth IRA

A retirement account funded with after-tax dollars, where qualified withdrawals in retirement are completely tax-free.

A Roth IRA flips the usual tax deal: you contribute money you have already paid taxes on, and in exchange, all future growth and withdrawals (after age 59½ and a 5-year holding period) are tax-free. It is especially powerful for younger investors who expect to be in a higher tax bracket later and have decades for tax-free compounding.

Example

Contribute the 2026 limit of $7,000 per year from age 25 to 65 in a Roth IRA growing at 8%, and you could retire with well over $1.8 million — every dollar of it withdrawable tax-free.

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