what’s a Roth IRA?

Question

I’ve heard this is something I should get or setup but don’t really know what is it.

In: 3

Answer 1

Let’s say you put $100 into a Roth IRA. 30 years later it’s worth $10,000 and you take it out of your Roth IRA and put it into your bank account.

The tax bill from the IRS on that gain of $9,900?

$0.

That’s the power of a Roth IRA. You don’t pay taxes on the gains you get. With a Traditional IRA, you’d pay taxes on that $9,900.