Planning for retirement is one of the most important things I help clients do — and choosing the right retirement savings vehicle can make a significant difference in how much you actually keep after taxes. Of all the options available, the Roth IRA is one I recommend most enthusiastically for many clients, and here’s why.
How a Roth IRA Differs from a Traditional IRA or 401(k)
Most traditional retirement plans — 401(k)s, traditional IRAs, SEPs, and SIMPLE IRAs — are funded with pre-tax dollars. That means you get a tax deduction today, but you pay income taxes on every dollar you withdraw in retirement.
A Roth IRA works the opposite way: you contribute money that’s already been taxed, and in return, your money grows completely tax-free and qualified withdrawals in retirement are 100% tax-free. For many of my clients — especially those who expect to be in a higher tax bracket later, or who simply want certainty about their future tax bill — that trade-off is a very good one.
Key Benefits of a Roth IRA I Walk Clients Through
- Tax-free growth: Every dollar of growth in your Roth IRA is yours to keep. No taxes on dividends, capital gains, or interest along the way.
- Tax-free withdrawals in retirement: After age 59½, and once the account has been open for at least 5 years, you can withdraw any amount completely tax-free. This is especially powerful if tax rates rise in the future.
- No Required Minimum Distributions (RMDs): Traditional IRAs and 401(k)s force you to start withdrawing money at age 73, whether you need it or not. Roth IRAs have no RMDs during your lifetime, giving you complete control over when and how you access your money.
- Estate planning advantages: A Roth IRA can be passed to heirs who continue to benefit from tax-free growth and distributions, subject to certain rules. This makes it a powerful multi-generational wealth-building tool.
- Contribution flexibility: Unlike traditional IRAs, you can continue contributing to a Roth IRA at any age as long as you have earned income.
Roth IRA Contribution Limits and Income Restrictions
For 2026, you can contribute up to $7,500 per year to a Roth IRA ($8,600 if you’re age 50 or older). However, eligibility to contribute phases out at higher income levels. If your income exceeds the limit, a “backdoor Roth” strategy may still allow you to fund one — I can walk you through how that works.
Roth vs. Traditional: Which Is Right for You?
The decision between a Roth and a traditional account comes down to one key question: do you expect to be in a higher or lower tax bracket in retirement than you are today? If higher — pay taxes now with a Roth. If lower — defer with a traditional account. For younger clients early in their careers, I almost always lean toward the Roth.
See How Much Your Roth IRA Could Be Worth
Use the calculator below to project the future value of your Roth IRA based on your contributions, time horizon, and expected rate of return.