DayCents

Roth IRA

A Roth IRA is a retirement account you fund with after-tax money, so qualified withdrawals in retirement — including all the growth — are completely tax-free. You get no deduction now, but decades of compounding come out untaxed, and there are no required minimum distributions during your lifetime.

The 2026 contribution limit is $7,500 ($8,600 with the age-50+ catch-up), and the ability to contribute phases out at higher incomes. Because you can withdraw your contributions (not earnings) anytime penalty-free, a Roth doubles as a flexible backup — though leaving it to compound is almost always the better move.