Definition, Meaning & Synonyms

roth-ira

noun

/rɒθ ˈaɪ.ɑːr.eɪ/

Definition

A Roth IRA is a type of individual retirement account that allows individuals to invest after-tax income, with the benefit of tax-free growth and tax-free withdrawals in retirement.

Examples

Jane decided to open a Roth IRA to take advantage of tax-free withdrawals.
Contributing to a Roth IRA can be a smart financial strategy for long-term savings.
Many financial advisors recommend diversifying retirement accounts, including a Roth IRA.

Meaning

A Roth IRA is designed to help individuals save for retirement, providing a way to grow investments without paying taxes on the earnings when withdrawn in retirement.