Roth IRA Definition

While Roth IRAs are similar in some ways to traditional IRAs, there are some key differences in terms of eligibility, distributions, and the 70 ½ rule. A key point and the most widely talked about difference between a Roth IRA and a traditional IRA is that Roth IRA holders do not receive a tax deduction upon making a contribution. Instead, the contributed dollars grow tax-deferred and if withdrawn after the IRA holder reaches age 59 ½ all earnings are distributed tax-free.

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