A Roth IRA is an individual retirement account where contributions are made with after-tax dollars. All growth and withdrawals after age 59½ are completely tax-free. Unlike traditional IRAs, there are no required minimum distributions during the account holder's lifetime.
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Pro Tip
Young workers in low tax brackets should almost always choose Roth over traditional — they pay taxes now at low rates and enjoy decades of tax-free growth.
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Did You Know?
The Roth IRA was created by the Taxpayer Relief Act of 1997 and named after its chief legislative sponsor, Senator William Roth of Delaware.
References
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