Now if you’re an advisor with clients with a variety of different needs, this post doesn’t really apply to you.

A Roth IRA is an individual retirement account where the deposits into the account are made with money that has already been taxed. The dividends and growth of the asset (a fancy word for money) in the account is tax free so when you retire you can withdraw money from a Roth IRA without paying a penny to uncle Sam. I do not have a roth ira. I own a traditional ira account with T. Rowe Price. The money I put into an account like this comes from my bi-weekly paycheck *before* taxes are taken out. Every pay period a fixed amount of dollars are deducted from my earnings and deposited into a 401k account sponsored by my employer. Then the taxes I owe the US government are computed on the remaining money in my payroll check. Uncle Sam gets his cut and the rest is mine. In a 401k or a traditional IRA the money deposited in the account is done so *before* federal and/or state taxes are taken out. However, when I retire and start to withdraw money from this type of an account uncle Sam will charge me taxes on it. A Roth IRA basically lets you take money that you have already paid income taxes on and use it to invest tax free. Meaning that any earnings you make from your investment is not taxable. However, there are still strict regulations you have to abide by regarding the disposition of this money so you have to do your homework before opening one of these accounts. Any money you put in generally is not available before age 59.5 without taking a stiff penalty from the IRS.