Short answerA Roth IRA is a retirement account you fund with after-tax money. You pay tax now, and qualified withdrawals in retirement come out tax-free. The 2026 limit is $7,500 if you are under 50.
The one-sentence version
A Roth IRA is a retirement account that taxes you on the way in so you do not pay tax on the way out.
A container, not an investment
Think of it as a container. The account itself is not an investment.
The money you put inside gets invested in things you choose. Those investments rise and fall on their own.
Tax now, none later
You contribute money you already paid tax on. In retirement, qualified withdrawals are tax-free.
That is the mirror image of a traditional IRA, where you get the tax break now and pay later.
The 2026 numbers
These are the IRS limits for 2026. Copy them, do not trust memory.
- Under 50: $7,500
- Age 50 and up: $8,600, including a $1,100 catch-up contribution
- Single filers: full contributions up to $153,000 MAGI, phasing out by $168,000
- Joint filers: full contributions up to $242,000 MAGI, phasing out by $252,000
- Roth 401(k) employee deferral limit: $24,500
Who looks at it first
Early-career workers look at it first. So do people in a lower bracket than they expect in retirement.
If your income is near the phase-out range, check the numbers before you contribute.
Your contributions can come back out
You can withdraw your contributions at any time, tax-free and penalty-free. You already paid tax on that money.
Earnings follow stricter rules. Qualified earnings withdrawals need you at 59.5 or older, with the account open at least five years.
Compare it against a traditional account with the Roth vs traditional calculator. My short intro guide is here: What is a Roth IRA?.