A Roth IRA is a special type of individual retirement arrangement that has unique tax benefits different from those associated with “Traditional” IRAs.

Unlike Traditional IRAs, contributions to Roth IRAs are not tax deductible. But, if the requirements are satisfied, Roth IRA distributions are tax free. Also, you can make Roth IRA contributions even after you reach age 70½ as long as you have earned income (or file a joint federal income tax return and your spouse has earned income). Roth IRA contributions may, however, only be made if your modified adjusted gross income (MAGI) is within the allowable limits. As a Roth IRA owner, you are never required to take distributions while you are alive.

Roth IRAs were created as part of the Taxpayer Relief Act of 1997, and became effective January 1, 1998.

While Roth IRAs have been available for more than a decade, they generally have not received as much publicity as Traditional IRAs.  Although there are arguably a number of reasons why Roth IRAs have not historically received as much attention as Traditional IRAs, much of the obscurity is likely attributable to the simple fact that a contribution to a Roth IRA is not tax deductible. However, with the 2010 tax law changes regarding Roth IRA conversion eligibility, many tax planning professionals and investors have begun to pay closer attention to the benefits of Roth IRAs.