Self-Directed Roth IRAs

Benefit: Grow your retirement account over time tax-deferred and distributions are tax-free, once certain eligibility requirements are met. There are no yearly tax-deductions with a Roth IRA.

Overview: Created in 1997 by Senator Roth of Delaware, contributions are made with after-tax dollars and are NOT tax deductible. All funds within the Roth IRA compound tax-free and all withdrawals from the account are also tax free (as long as the account owner is 59½ and the account has been opened for five years).

One of the benefits of a Roth IRA is that there is no required mandatory distribution (RMD) at age 70½. Individuals may contribute as long as they like, and all withdrawals continue to be tax free (if the account has been open for at least five years).

Anyone who has earned income and falls within the MAGI (Modified Adjusted Gross Income) limits established by the Internal Revenue Service can establish a Roth IRA.