---
title: What is a Roth IRA, and how does it differ from a Traditional IRA?
description: Help Center
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# What is a Roth IRA, and how does it differ from a Traditional IRA?

A Roth IRA is a retirement account that allows for tax-free growth and tax-free withdrawals in retirement. Contributions are made with after-tax dollars, meaning you pay taxes on the money before it is deposited into the account. This differs from a Traditional IRA, where contributions are typically made with pre-tax dollars and are taxed upon withdrawal.

### Key Differences:

1. **Tax Treatment**:
   
     - **Roth IRA**: Contributions are after-tax, and withdrawals in retirement are tax-free.
     - **Traditional IRA**: Contributions are tax-deferred, and withdrawals are taxed as income.
2. **Contribution Limits**:
   
     - Both accounts have similar contribution limits set by the IRS, but income limits for Roth IRAs may prevent higher earners from contributing.
3. **Required Minimum Distributions (RMDs)**:
   
     - **Roth IRA**: No RMDs during the account holder's lifetime.
     - **Traditional IRA**: RMDs must begin at age 73.

### Benefits of Roth IRAs:

- **Tax-free withdrawals** in retirement.
- **No RMDs**.
- Ideal for those who expect their tax rate to be higher in retirement.

### Conclusion:

The main difference between a Roth IRA and a Traditional IRA is when you pay taxes—Roth IRAs offer tax-free growth and withdrawals, while Traditional IRAs provide tax-deferred contributions but are taxed when you withdraw funds in retirement. Each account has unique benefits, making it important to choose based on your current and future tax situation.

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