US rules

Roth IRA

By Greg Parsons, editor · Updated October 14, 2026

Educational only, not financial advice.

A Roth IRA is a type of U.S. IRA where you contribute money you have already paid tax on, and qualified withdrawals later come out tax-free.

Why it matters

• Contributions are not deductible, unlike a traditional IRA.
• Whether you can contribute depends on your filing status and modified adjusted gross income. Check IRS.gov for the current thresholds.
• The original owner does not have to take required minimum distributions.
• It shares one annual limit with traditional IRAs: $7,500 for 2026, or $8,600 at age 50 or older.

Simple example

• If you expect a higher tax rate in retirement than today, paying tax now through a Roth can come out ahead. If you expect a lower rate later, a traditional IRA may.

Canadian equivalent

A Roth IRA is closest to a TFSA, though the TFSA allows withdrawals at any time.

Related terms

• IRA
• 401(k)
• TFSA

Learn more

• Roth vs Traditional IRA