A Roth IRA (Individual Retirement Account) is a retirement account funded with after-tax dollars where investments grow tax-free and qualified withdrawals are entirely tax-free. The 2026 contribution limit is $7,000 ($8,000 if age 50+). Contributions phase out at $146,000-$161,000 income (single) and $230,000-$240,000 (married joint). Contributions (not earnings) can be withdrawn anytime tax-and-penalty-free. Roth IRAs are particularly powerful for young earners (low current tax rate, decades of tax-free growth) and high earners using the Backdoor Roth technique. No required minimum distributions during owner's lifetime. The best long-term wealth vehicle most US savers don't max out.
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401(k)
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Active management is the attempt to outperform a benchmark through stock selection, sector rotation, market timing, or any…
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Backdoor Roth
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Beta
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Roth IRA
August 22, 2026 · Aditya Gupta
Investing
Related terms
401(k)
A 401(k) is an employer-sponsored retirement plan where employees contribute pre-tax salary that grows tax-deferred until withdrawal. The…
Active Management
Active management is the attempt to outperform a benchmark through stock selection, sector rotation, market timing, or any…
Alpha
Alpha is excess return relative to a benchmark, adjusted for risk (beta). Positive alpha means an investment outperformed…
Asset Allocation
Asset allocation is the percentage split of your portfolio across asset classes — typically stocks, bonds, and cash,…
Backdoor Roth
The Backdoor Roth is a strategy for high earners (above the Roth IRA income limit) to contribute to…
Beta
Beta measures a stock's volatility relative to the overall market (S&P 500 = beta of 1). Stocks with…
