Life · Chapter 11 · IRAs
Roth IRA
Definition
Back-end benefits: contributions are after-tax (never deductible), but qualified withdrawals of earnings are completely TAX-FREE. Same contribution limits as traditional; no age limit; employer-plan coverage is irrelevant — but high earners are phased out (income limits). NO required minimum distributions during the owner's life — funds can pass intact to heirs.
Exam tip
Traditional vs Roth in one breath: deduct now & tax later vs pay tax now & never again. Roth is the ONLY one with income limits on contributing — and the only one with NO RMDs.
Easy to confuse with
These are what this term gets tested against — if you can't tell them apart cold, drill the contrast.
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