Roth IRA
An individual retirement account funded with after-tax dollars; qualified withdrawals are tax-free.
You pay tax on contributions today, then growth and qualified withdrawals in retirement are completely tax-free. The 2024 contribution limit is $7,000 ($8,000 if 50+). Eligibility phases out at higher incomes (for 2024, single filers between $146,000 and $161,000 MAGI, married filing jointly between $230,000 and $240,000). You can withdraw your own contributions (not earnings) at any time without tax or penalty. The IRS publishes updated limits each year.
Inside Finlo
A 60-second lesson that puts this term in context, alongside the others, lives inside the Finlo app.