Roth IRA

Maximize your retirement savings with a Roth individual retirement account (IRA).

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What's a Roth IRA?

It’s a retirement account funded with post-tax dollars, offering tax-free withdrawals in retirement. Withdrawals are generally tax and penalty free if you meet these requirements: 

  • You’ve owned the account for 5 years.1
  • You're age 59½ or older.2

Compare Roth vs. traditional IRAs

Benefits of a Roth IRA

Flexible withdrawals

Unlike traditional IRAs, you can withdraw your original contributions anytime without taxes or penalties. And there are no required minimum distributions (RMDs).

Get details on IRA withdrawals

No age limit

As long as you have qualifying earned income, you can contribute to a Roth IRA, no matter your age.

No employer-plan restrictions

You can still contribute to a Roth IRA even if you're covered by an employer's retirement plan, like a traditional or Roth 401(k) or 403(b).

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.

Figure out your max contribution

Roth IRA contributions may vary 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 you can consider a backdoor Roth IRA.

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Get details on IRA contribution limits and deadlines

Roth IRA investment options

Two ways to save for one goal.

Do it yourself

Build your retirement portfolio with our world class, low-cost mutual funds and ETFs.

Do it yourself

Build your retirement portfolio with our world class, low-cost mutual funds and ETFs.

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Explore professional advice

Plan your retirement with judgement-free advice from a company that’s built to prioritize your needs.

Explore professional advice

Plan your retirement with judgement-free advice from a company that’s built to prioritize your needs.

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Start saving for retirement

Need more information? Learn how to open a Vanguard account

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Frequently asked questions

Yes, you can open more than one Roth IRA. However, you can't exceed the IRS contribution limits across all existing Roth accounts.

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,1 you can withdraw money—contributions plus earnings—from your Roth IRA without paying any penalties or taxes.2

See more key benefits of Roth IRAs

A rollover is when you move money from a previous employer plan into an individual IRA. If you have Roth 401(k) assets, you can roll over those assets into a Roth IRA, tax-free. 

If you have a pre-tax 401(k) monies, you can still roll over these assets into a Roth IRA. However, since Roth IRA contributions are made with already taxed dollars this would be considered a "Roth conversion." If you choose to convert your to a Roth IRA, it’s likely that you’ll receive a tax bill.

Start the rollover

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.

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

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.