By Patricia Uceda, Spring 2015 Graduate Research Assistant
Roth IRAs are nearly identical to IRAs, although the money contributed is after-tax income similar to Roth 401(k)s. The earnings on this type of account are tax-free, and you can leave your money in the account for as long as you want. However, Roth IRA contributions are not tax deductible, and you must meet certain income requirements in order to make contributions.
One benefit of Roth IRAs is that you may withdraw your contributions penalty-free at any time. You will only be charged the 10% penalty if you withdraw the earnings on your investment before age 59 ½.