Money can be accessible
It used to be that when you put away money for retirement, you couldn't touch it until retirement -- except in some very limited circumstances.
That's not always true anymore.
With a Roth IRA, you can withdraw any money you contribute at any time without taxes or penalties, says Ed Slott, CPA and author of "The Retirement Savings Time Bomb ... and How to Defuse It."
The idea that retirement savings is locked up for a far-flung future date is a mental block for a lot of potential savers, says Slott. "That is one of the things that turned me off from (traditional) IRAs years ago," he says. "But now that's not the case with a Roth."
The nice thing about a Roth is those earnings won't be taxed during retirement. The trade-off with a Roth is that you don't get a tax deduction now when you make a contribution.
But continuous access to your money and the ability to grow it tax-free more than make up for forfeiting a one-time tax deduction, says Slott.
"When you make a $5,000 contribution to a Roth IRA, you have immediate access to that money," says Slott. "So if you need it, it's there."