To take out more than just the contributions, investors must be at least 59 1/2 years old and the account must have been opened for five years. But there are some qualified withdrawals if you don't meet the age or holding period requirement.
"One of them is, for instance, a first-time home purchase up to $10,000. Another is postsecondary education expenses," Bruno says.
There are some other circumstances as well, according to the IRS:
- Permanent disability.
- Unreimbursed medical expenses that exceed 10 percent of adjusted gross income -- 7.5 percent for those who are 65 or older through the 2016 tax year.
- Back taxes.
- Paying health insurance premiums while unemployed.
You can contribute after age 70 1/2
With a traditional IRA, investors must stop making contributions when they turn 70 1/2 years old, at which point they are forced to take distributions and begin paying taxes on that money.
The Roth IRA has no required minimum distributions. That means you can live to 120 without ever tapping your Roth IRA. Furthermore, anyone with earned income can keep adding to their Roth IRA account regardless of age.
If you're earning an income at age 87 and want to save for the future, have at it: You can continue to contribute until you quit working or drop dead, whichever comes first.
"If you're still working, you can contribute," says Bruno.
Your heirs benefit
The hands-off approach the IRS takes with Roth IRAs is beneficial for your heirs as well. Savers with ample accounts can leave their beneficiaries tax-free income that can be stretched over their lifetime.
"It allows you to prepay taxes for future generations," says CFP professional Frank Armstrong, founder of Investor Solutions in Miami.
"As an estate-planning tool, it's extraordinarily powerful," he says. "Grandchildren would receive tax-free income for the rest of their lives; all of the earnings for an extended period of time would be totally tax-free."
The trade-off is that you pay taxes now on the contribution. But if you anticipate leaving money to kids or grandkids, forgoing the tax break today can give your bequest a boost in the future.
High earners have a 'back-door' entry
High-income earners generally cannot make a contribution to a Roth IRA. The IRS has income thresholds that limit the size of the contribution that high earners can make. Above that threshold, direct contributions to a Roth IRA are not allowed.
But there is a way around that. People who make a lot of money can make a nondeductible contribution to a traditional IRA and then convert it to a Roth.
"It's what we call a back-door Roth. Everybody can do a nondeductible IRA and then convert to a Roth," says Armstrong.
Note that the IRS requires you to take into consideration all of your pretax holdings when figuring the tax liability of a conversion. Because it's complicated, it's best to consult a tax professional before attempting this maneuver.
A Roth can be the best option
For people who are looking for relief from today's tax bill, making a contribution to a traditional IRA offers a welcome tax deduction that you won't get with a Roth.
"If your tax situation is very high today and you expect it to be lower after you retire, then you want to use a regular IRA or 401(k)," says Armstrong, of Investor Solutions.
But taking advantage of the tax break today leaves many of the valuable benefits of the Roth on the table.
"If you are eligible and have options, the Roth IRA over time is going to deliver a greater benefit in retirement," Fidelity's Hevert says. "The ultimate benefit is in retirement because they are tax-free and can stay in the tax-free account even longer. In all the comparisons, putting money into the tax-free option will typically outweigh the other options."