Definition, Meaning & Synonyms

roth

noun

roth

Definition

Roth refers to a type of individual retirement account (IRA) that allows individuals to invest after-tax dollars for retirement. Withdrawals, including earnings, are tax-free in retirement, provided certain conditions are met.

Examples

She decided to open a Roth IRA to take advantage of tax-free withdrawals during her retirement.
Many financial advisors recommend contributing to a Roth account for long-term savings.
The Roth IRA is a popular choice among young investors starting their retirement planning.

Meaning

The term ‘Roth’ is derived from the name of Senator William Roth, who sponsored the legislation that created this type of retirement account in the United States.