# Roth IRA

*Retirement & Benefits — Finicade finance glossary*

A Roth IRA is funded with after-tax money and then grows and pays out entirely tax-free in retirement. It has two features nothing else combines: no required minimum distributions, so it can compound untouched for life, and contributions (not earnings) can be withdrawn at any time without tax or penalty. Direct contributions are barred above income limits, which is what the backdoor Roth exists to route around.

**Also known as:** Roth, Roth individual retirement account

**Related terms:** [Traditional IRA](https://finicade.com/glossary/traditional-ira), [Roth Conversion](https://finicade.com/glossary/roth-conversion), [Backdoor Roth IRA](https://finicade.com/glossary/backdoor-roth-ira), [Tax-Advantaged Account](https://finicade.com/glossary/tax-advantaged-account), [Modified Adjusted Gross Income (MAGI)](https://finicade.com/glossary/modified-adjusted-gross-income)

Source: https://finicade.com/glossary/roth-ira