<p>Roth accounts offer one of the only ways you can grow money tax FREE! At the link above you can learn more about how a Roth IRA is different from a traditional IRA.</p><p>The Roth retirement account is designed to help individuals save for retirement and eliminate any taxes owed when funds are withdrawn. </p><p>The only downside to a Roth is that you can&#39;t contribute more. There is a maximum allowable contribution amount - and unfortunately if your income is too high you can&#39;t make a Roth IRA contribution - although you may be able to contribute to a Roth Account through your 401(k) plan - and at any income level you can convert a traditional IRA to a Roth.</p><p>Wondering how much you can contribute to a Roth IRA or if you make too much to contribute?</p><p>You have to have earned income to contribute (if married as long as you have enough earned income you can make a spousal Roth contribution even if your spouse has no earned income.)</p><p>And if you have too much earned income, you can&#39;t contribute to a Roth IRA - although you may still be able to contribute to a Roth 401(k) or use a Roth conversion.</p><p>The rules and limits change a bit each year. At the link above you&#39;ll find an article that covers all the latest Roth IRA contribution limits and earned income rules.</p><p>There&#39;s a mass of messy information out there about Roth IRA withdrawals. The bottom line is <em>most of the time</em> your Roth IRA withdrawal will be tax free.</p><p>The exception to tax-free withdrawals: income earned on investments inside the Roth may be taxable if you take a non-qualified withdrawal. And amounts you converted to a Roth from a traditional retirement plan may be subject to taxes if you take the money out too soon after conversion. Find the specifics at the link above.</p><p>Also note - unlike traditional IRAs, regardless of age, you are not required to take distributions from a Roth. You can leave the account to grow and pass it along to your heirs tax free.</p><p>If you decide to take a distribution before age 59 1/2, or before you have had the Roth at least five years, read the withdrawal rules carefully to see if you&#39;ll owe tax on any portion of the withdrawal. If you are disabled, or paying for first-time home-buyer expenses you&#39;ll likely qualify for an exception to any early withdrawal penalty taxes.</p><p>With a Roth conversion you take a withdrawal from a traditional IRA or 401(k) and convert it to a Roth. You&#39;ll pay ordinary income taxes on the withdrawal amount but not early withdrawal penalty taxes.</p><p>A Roth conversion makes sense for many folks who want their money to grow tax free. At the link above you&#39;ll learn the five questions to ask to see if a conversion might make sense for you.</p><p>The five questions will be a useful resource if you are considering evaluating the benefits of a Roth conversion on your own. If you have a financial advisor or tax expert to lean on, consider having a second set of eyes double check your calculations.</p><p>More and more employers are offering the option to contribute to a Designated Roth account through their employer-sponsored 401(k) plan.</p><p>The great thing about this is you can contribute an amount up to the 401(k) salary deferral limit - which is a much larger amount than the Roth IRA maximum contribution limit. </p><p>Encourage your employer to offer a Roth option in the 401(k) plan. You can even contribute half to the traditional deductible 401(k) and half to the Roth.</p><p>At the link above you can read up on the differences between Roth 401(k) accounts, traditional 401(k) accounts and Roth IRAs.</p>