Roth IRA
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A Roth IRA is an individual retirement account (IRA) in the United States. A Roth IRA may invest in a variety of options such as stock or mutual funds. As with all IRAs, there are specific elegibility and filing status requirements mandated by the U.S. Internal Revenue Service. A Roth IRA's main advantage is its tax structure. Contributions are made post-tax; earnings and withdrawals are tax free. In contrast, contributions to a traditional IRA are made pre-tax and earnings are tax free, but withdrawals are subject to tax. Another advantage of the Roth IRA is that there are fewer restrictions on withdrawals than with a traditional IRA.
It is named after its chief legislative sponsor, the late U.S. Senator William Roth.
External links
- Open Directory Project: List of IRA explanation websites (http://www.dmoz.org/Home/Personal_Finance/Retirement/Individual_Retirement_Accounts/)