Roth Individual Retirement Account (Roth IRA) for Beginners
A Roth Individual Retirement Account (Roth IRA) is a United States retirement account funded with after-tax money. You do not usually deduct contributions today, but qualified withdrawals can be tax-free later.
How a Roth IRA works
You contribute money from taxable compensation, choose eligible investments inside the account, and let the account grow. The Internal Revenue Service says Roth IRA contributions are not deductible, but qualified distributions can be tax-free when the rules are met.
2026 contribution basics
| Rule | Beginner version |
|---|---|
| Annual IRA limit | For 2026, total traditional and Roth Individual Retirement Account contributions are limited to $7,500, or $8,600 if age 50 or older, or taxable compensation if lower. |
| Income limits | Roth IRA eligibility phases out at higher incomes. The 2026 phase-out ranges are $153,000 to $168,000 for single filers and heads of household, and $242,000 to $252,000 for married couples filing jointly. |
| Tax treatment | Contributions are made with after-tax money. Qualified withdrawals can be tax-free. |
| Age rules | There is no age limit for regular Roth IRA contributions if you have eligible taxable compensation. |
When a Roth IRA may make sense
- You are in a lower tax bracket now than you expect later.
- You want tax-free qualified retirement withdrawals.
- You want flexibility because contributions can generally be withdrawn separately from earnings.
- You already have an emergency fund and high-interest debt is under control.
What beginners should avoid
Roth IRA eligibility can phase out based on modified adjusted gross income. Check current Internal Revenue Service rules before contributing.
Contributions and investment earnings can have different withdrawal rules.
The account can hold investments that rise or fall in value.
Use the MyMoneyAnswer tool if you are deciding whether retirement investing should come before debt payoff, emergency savings, or another next step.