A Roth IRA is a type of Individual Retirement Account (IRA) that is named after the US senator William V. Roth who was the chief legislative sponsor of this scheme of retirement accounts. Roth IRAs are different from other IRAs in many ways. Roth IRAs were established in the year 1998 (Public law 105-34). Similar to other IRAs, the Roth IRAs are also created to encourage the members of the active work force to save regularly in order to be able to meet their post retirement financial needs. This calls for a disciplined approach on the part of the account owner and requires regular contributions towards the retirement account. It also provides twin benefits to the account owners. The tax-deductible net income is reduced by an amount equivalent to the IRA contribution and the assets also earn returns by way of investment into various financial instruments such as stocks, mutual funds and bonds in which the IRA assets are invested by the account custodian or the administrator.
The biggest advantage enjoyed by a Roth IRA account owner is the tax benefits offered by the government on such schemes. A Roth IRA accepts contributions from the income earned in a financial year...
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