Roth IRA
Definition
A retirement account funded with after-tax dollars. Investments grow tax-free, and qualified withdrawals in retirement are completely tax-free. Ideal for those who expect to be in a higher tax bracket in retirement. Income limits apply.
Related Terms
401(k)
An employer-sponsored retirement savings plan that allows employees to contribute a portion of their pre-tax salary. Many employers match contributions up to a certain percentage. The 2026 contribution limit is $23,500 ($31,000 if over 50).
IRA (Individual Retirement Account)
A tax-advantaged retirement account for individuals. Traditional IRA contributions may be tax-deductible with taxed withdrawals. Roth IRA contributions are after-tax with tax-free withdrawals. 2026 limit: $7,000 ($8,000 if 50+).
Get Smarter About Investing
Free weekly market insights, calculator updates, and investing education.