What are the benefits of a Roth IRA?

A Roth IRA, with its tax-free growth potential and tax-free withdrawals for you and your heirs, is a way you may be able to do just that (as long as certain requirements are met). 1 And those are just a couple of the benefits of a Roth IRA. One important note: Not everyone can contribute to a Roth IRA, because of IRS income limits.

Why should you invest in a Roth IRA?

Get tax-free growth potential, tax-free withdrawals, and even more. Contributions to a Roth IRA are made on an after-tax basis. You can withdraw your contributions at any time and any potential earnings can be withdrawn tax-free 1 in retirement. Contributing to a Roth IRA gives you tax flexibility in retirement.

Should you invest in a Roth IRA or a nonretirement account?

One of the benefits of a Roth IRA is that the money you invest in a Roth IRA grows tax-free, so you don’t have to worry about reporting investment earnings—the money your money makes—when you file your taxes. By comparison, if you invest in a nonretirement account, your earnings are subject to federal, state, and local taxes each year. 2.