The Roth IRA has some income restrictions (see your tax advisor for eligibility details). Roth IRA contributions are made with after-tax dollars.
Here's the upside of the Roth IRA:
- Tax and penalty free withdrawals of regular contributions-at any time, for any reason.
- Tax and penalty free withdrawals of earnings if the account is open for at least five years and one of the following reasons for withdrawal applies: age 59 ½ or older, disability, death, or first-time home purchase.
- No age limitations on contributions- it's never too early or too late to start saving because you can put money in as long as you earn compensation.
- No required withdrawals at age 70 ½