retirement

What is a Roth IRA?

 

What is a Roth IRA?

The Bankrate.com financial term of the day is: "Roth IRA."

A Roth IRA is a retirement savings account that's a bit different from a traditional IRA. With a Roth, the money you put in is not deductible, the way it might be with a regular IRA. But you won't have to worry about taxes when you take your savings out, at least not if you've had the account for at least five years and are at least 59 ½ years old when you start the withdrawals. You may be wondering, "Why is it called a Roth IRA?" Well, it's named after the late Sen. William Roth of Delaware, who sponsored the legislation creating the accounts when he was the chairman of the Senate Finance Committee.

A Roth IRA is a retirement plan that's tweaked in a way that might provide some tax advantages.

For help setting yourself up for a comfortable retirement, visit the Retirement section at Bankrate.com.

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