Roth IRA

A U.S. individual retirement account funded with after-tax dollars, offering tax-free growth and tax-free withdrawals in retirement. Named after Senator William Roth, who championed its creation in the Taxpayer Relief Act of 1997, the Roth IRA has become one of the most powerful tax-advantaged vehicles available to individual investors. Contributions are limited annually, and income limits restrict who can contribute directly, though the "backdoor Roth" conversion strategy provides a workaround for higher earners.