A Roth IRA (Individual Retirement Account) is a type of tax advantaged retirement savings account. Contributions are made with after-tax dollars and withdrawals are tax free when withdrawn in retirement. You can withdraw your contributions at any time, for any reason tax-free and penalty-free because you’ve already paid taxes on that money. The investment growth is different and has age and time restrictions you must follow to get the tax-free benefit and avoid penalties. You may also use Roth contributions to pay for qualified college costs and won’t owe any penalty. You will, however, owe taxes on any investment earnings you withdraw (unless you’re over age 59½ and have owned the account for five years or more). There are no required distributions when you reach retirement and the money can continue to grow tax free and be passed to your heirs if not withdrawn. IRA’s have annual contribution limits as well as income limits as determined by the IRS.