Roth IRAs allow for tax-free withdrawals in retirement, but contributions are made with after-tax dollars. This means the money you put into a Roth IRA has already been taxed, and in return, your withdrawals in retirement are tax-free. There is also no age limit for contributions, making it a flexible and popular choice for many retirement savers.

Unlike traditional IRAs, where contributions may be tax-deductible but withdrawals are taxed, Roth IRAs provide a long-term advantage for those who expect to be in a higher tax bracket in the future. Additionally, Roth IRAs have no required minimum distributions, allowing savers more control over when and how they access their funds in retirement.