Roth IRA offers tax-free retirement savings for smart investors

The Roth IRA allows investors to contribute after-tax income, enabling tax-free withdrawals in retirement. This differs from traditional accounts, where taxes are paid upon withdrawal. Investors can potentially save significant amounts in taxes over time. Roth IRAs have annual contribution limits of $7,000 for those under 50 and $8,000 for those 50 and older. Starting contributions early and maximizing limits can help investors reach $1 million in about 30 years with a 10% return. High earners face income limits for direct contributions, with phase-outs starting at $150,000 for individuals and $236,000 for couples in 2025. They can use strategies like backdoor Roth IRAs to access these accounts.