Roth individual retirement account (IRA)

An individual retirement account that offers tax-free growth and potentially tax-free withdrawals in retirement.1

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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 years2 and you're age 59½ or older, you can withdraw your money when you want to and you won't owe any federal taxes.1

Compare Roth vs. traditional IRAs

Other Roth IRA advantages

No RMDs

There are no required minimum distributions (RMDs) for as long as you live.

Get details on IRA withdrawals

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 2025 tax year that's $7,000, or $8,000 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.3

Learn more about inherited IRAs

Required minimum distributions (RMDs)

Under federal tax law, most owners of IRAs (except Roth IRAs) must withdraw part of their tax-deferred savings each year, starting at age 72 (age 70½ if you attained age 70½ before 2020). If you withdraw less than your RMD, you may owe a 50% penalty tax on the difference. RMDs are intended to ensure that the assets in these types of accounts are eventually subject to taxation.

Modified adjusted gross income (MAGI)

An amount used to determine a taxpayer's IRA eligibility. Generally, it's the taxpayer's adjusted gross income calculated without certain deductions and exclusions.

Compounding

The snowball effect that happens when your earnings generate even more earnings, not only on your original investments, but also on any interest, dividends, and capital gains that accumulate. That means that your "money makes money" and can grow faster over time.

What you need to get started

If you're not already a Vanguard client, you'll need to create a login. Once you've created your login, you'll answer a few personal and regulatory questions. For a smoother process, you'll want to have this information ready:

  • Your bank account and routing numbers.
  • Your Social Security number.
  • Your employer's name and address.

Please note: You need to have a permanent U.S. mailing address to open an account. If you live or work outside the U.S., please check out our international site.

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What does investing with us look like?

At Vanguard, you'll have access to a variety of features that help you manage and keep track of your retirement journey.

This illustration is hypothetical and isn't representative of any client's account.

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Ready to invest?

New to Vanguard or looking to consolidate your savings?

Open or transfer accounts

Already a Vanguard client? Log in to view your account.

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Frequently asked questions

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.

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.

Get details on Roth IRA income limits

Learn more about Roth conversions

A Roth IRA can be an advantage to your overall retirement strategy, as it offers tax-free growth and withdrawals. It can help you minimize taxes when you withdraw from your IRA for income in retirement. There are income limitations, as mentioned above, and withdrawal rules.

If you're age 59½ or older and have owned your account for at least 5 years,2 you can withdraw money—contributions plus earnings—from your Roth IRA without paying any penalties or taxes.1

See more key benefits of Roth IRAs

The biggest difference is the tax on withdrawals from each IRA after age 59½. If you withdraw from your Roth IRA at age 59½ or older and have owned your account for at least 5 years,2 your withdrawals come out tax free.1 Since contributions to traditional IRAs are often tax-deductible, if you withdraw at age 59½ or older, your withdrawals will be taxed as ordinary income.

Get a more in-depth comparison

Learn about IRA tax deductibility

If you left a Roth 401(k) with your previous employer, you can consolidate your holdings by rolling it over into a Vanguard Roth IRA.

Start the rollover

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

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.

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

All investing is subject to risk, including the possible loss of the money you invest.

Be aware that fluctuations in the financial markets and other factors may cause declines in the value of your account.

Vanguard's advice services are provided by Vanguard Advisers, Inc. ("VAI"), a registered investment advisor, or by Vanguard National Trust Company ("VNTC"), a federally chartered, limited-purpose trust company.

The services provided to clients will vary based upon the service selected, including management, fees, eligibility, and access to an advisor. Find VAI's Form CRS and each program's advisory brochure here for an overview.

VAI and VNTC are subsidiaries of The Vanguard Group, Inc., and affiliates of Vanguard Marketing Corporation. Neither VAI, VNTC, nor its affiliates guarantee profits or protection from losses.