When planning for retirement, choosing the right account can make a huge difference in how much money you get to keep. While 401(k)s and traditional IRAs offer tax advantages, the Roth IRA stands out as one of the most powerful retirement tools available.
A Roth IRA allows your money to grow tax free, gives you more flexibility with withdrawals, and doesn’t force you to take out funds in retirement. For many savers, these benefits can add up to significant long-term advantages.
Here’s why the Roth IRA might just be the best retirement account of all time.
1. You enjoy tax-free growth on your money
One of the biggest perks of a Roth IRA is tax-free growth. Unlike a traditional IRA or 401(k), where you’ll eventually have to pay taxes on your withdrawals, a Roth IRA lets your money grow completely tax free.
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Here’s how it works:
- You contribute after-tax dollars, meaning you don’t get a tax break upfront.
- Your investments grow over the years without being taxed.
- When you retire, every dollar you withdraw is 100% tax free (as long as you follow the withdrawal rules).
This can be a game-changer, especially if you expect to be in a higher tax bracket in retirement.
Don’t miss out on growing your retirement savings tax free. Check out our list of best Roth IRA accounts today.
2. No required minimum distributions (RMDs)
Most retirement accounts, like traditional IRAs and 401(k)s, come with required minimum distributions (RMDs). That means once you hit age 73, the IRS forces you to start withdrawing a set amount each year.
But with a Roth IRA? No RMDs. Ever.
This gives you complete control over your money in retirement. You can leave it untouched for as long as you want, let it keep growing tax free, and even pass it down to your heirs without forcing them into large, taxable withdrawals.
3. You can withdraw contributions anytime
Most retirement accounts lock up your money until age 59 1/2, hitting you with penalties if you withdraw early. But a Roth IRA is different.
Since you contribute after-tax dollars, you can withdraw your contributions (not your earnings) at any time, for any reason, without penalties or taxes.
For example, if you’ve contributed $30,000 over the years, you can take out up to $30,000 whenever you need it. This makes the Roth IRA a flexible option in case of emergencies or unexpected expenses.
If you’re thinking about leaving money to your loved ones, a Roth IRA is one of the best ways to do it. Since there are no RMDs, you can let your account grow for decades, and your heirs can inherit the money tax free.
Even though non-spouse beneficiaries now have to withdraw the funds within 10 years, they won’t owe taxes on the withdrawals. That means your Roth IRA can become a multi-generational wealth-building tool.
Is a Roth IRA right for you?
A Roth IRA isn’t for everyone. Since contributions are not tax deductible, high earners who expect to be in a lower tax bracket in retirement may benefit more from a traditional IRA or 401(k). There are also income limits to qualify for direct Roth IRA contributions ($153,000 for single filers and $228,000 for married couples in 2024).
But for those who qualify, the Roth IRA’s tax-free growth, flexible withdrawals, and lack of RMDs make it one of the most powerful retirement tools available.
