IRAs

A Roth IRA offers tax-free withdrawals

With a Roth IRA, you get a future bonus: Every penny you withdraw in retirement stays in your pocket, not Uncle Sam's.

Ready to get started? Open an IRA today

Ready to get started? Open an IRA today

What is a Roth IRA?

A Roth IRA is an individual retirement account that offers tax-free growth and tax-free withdrawals in retirement. Roth IRA rules dictate that as long as you've owned your account for 5 years* and you're age 59½ or older, you can withdraw your money when you want to and you won't owe any federal taxes.**

Compare Roth vs. traditional IRAs >


Other Roth IRA advantages

No RMDs

No age limit

You can put money in your account for as many years as you want, as long as you have earned income that qualifies.

No employer-plan restrictions

It doesn't matter if you're covered by an employer's retirement plan, such as a 401(k) or 403(b). As long as you don't exceed the IRS's income limits, you can still contribute the maximum annual amount to a Roth IRA.

For the 2020 and 2021 tax years, that's $6,000, or $7,000 if you're age 50 or older.

Get details on IRA contribution limits & deadlines

No taxes for your beneficiaries

You can pass your Roth IRA on to your beneficiaries, and their withdrawals will be tax-free.**

Learn more about inherited IRAs

Some things to think about

Nondeductible contributions Roth IRA contributions are never tax-deductible.

Income restrictions Contributions may be limited by how much you earn—your modified adjusted gross income (MAGI) must be less than the annual limit set by the IRS.

Get details on Roth IRA income limits

Is your income OK for a Roth IRA?

If your income is too high for a Roth IRA, you could get to a Roth through the "back door."

To use this strategy, you'd start by placing your contribution in a traditional IRA—which has no income limits. Then, you'd move the money into a Roth IRA using a Roth conversion.

But make sure you understand the tax consequences before using this strategy because a Roth conversion is permanent—the contribution can't be moved back to a traditional IRA.

Learn more about Roth conversions

The sooner, the better

The younger you are when you open your IRA, the greater your saving potential because you get that tax-free compounding clock ticking longer for you.

Learn more about the power of compounding


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*The 5-year holding period for Roth IRAs starts on the earlier of: (1) the date you first contributed directly to the IRA, (2) the date you rolled over a Roth 401(k) or Roth 403(b) to the Roth IRA, or (3) the date you converted a traditional IRA to the Roth IRA. If you're under age 59½ and you have one Roth IRA that holds proceeds from multiple conversions, you're required to keep track of the 5-year holding period for each conversion separately.

**If you inherit a Roth IRA, you must take RMDs, but they're tax-free as long as the original account owner held the account for at least 5 years.

**When taking withdrawals from an IRA before age 59½, you may have to pay ordinary income tax plus a 10% federal penalty tax. 

You may wish to consult a tax advisor about your situation.

Advice services are provided by Vanguard Advisers, Inc., a registered investment advisor, or by Vanguard National Trust Company, a federally chartered, limited-purpose trust company.