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IMPORTANT NOTE: See the section Roth IRA Conversions to learn about Roth IRA conversions that may be available to you even if you do not meet the criteria for a Roth IRA.

The Roth IRA allows you to save money on a tax-free basis, provided you meet the eligibility requirements and the holding period rules.

The Roth IRA allows for non-deductible contributions up to $6,000 in 2020 (Same as 2019), no matter what your age (provided you have earned income), and presents an opportunity to receive tax-free income when the funds are withdrawn. If you are age 50 or older, you can contribute a total of $7,000 to a Roth IRA.

The Roth contribution limit is also reduced for amounts contributed to a traditional IRA.

Tax-free distributions may be made from a Roth IRA if the IRA is held for at least five years, and if the distributions are made after age 59½, or because of death or disability. Penalty-free distributions are also allowed for "first-time homebuyers," subject to a $10,000 lifetime limit. The amount of distribution that represents earnings is subject to ordinary income tax if the IRA is held for less than five years and distributed prior to age 59½. For more information, see the section Investing for Retirement.

SUGGESTION: The required minimum distribution rules for traditional IRAs do not apply to Roth IRAs. Distributions from Roth IRAs need not begin at age 72 (70 1/2 if you reach 701 1/2 before January 1,2020)