Roth IRA
Business & Finance abbreviation · Personal Finance
| Stands for | Roth individual retirement account |
|---|---|
| Categories | Business & Finance |
Roth IRA stands for Roth individual retirement account, a personal finance abbreviation.
Retirement account funded with after-tax dollars in which qualified withdrawals, including all investment growth, are tax-free once the owner is 59½ and the account has been open five years. The ability to contribute directly phases out at higher incomes, and the original owner never has to take required minimum distributions.
Example: Since I'm in a low tax bracket this year, I'm putting the full amount into my Roth IRA instead of the traditional one.
Usage notes
Named after Senator William V. Roth Jr. of Delaware, who sponsored it in the Taxpayer Relief Act of 1997; "Roth" is capitalized because it is a surname. High earners above the income limits often use a "backdoor Roth," contributing to a traditional IRA and then converting it. Contributions, unlike earnings, can be withdrawn at any time without tax or penalty.
Related abbreviations
More personal finance abbreviations
- QDRO – Qualified domestic relations order
- QLAC – Qualified longevity annuity contract
- RDSP – Registered Disability Savings Plan
- RESP – Registered Education Savings Plan
- RMD – Required minimum distribution
- Roth 401(k) – Roth designated account within a 401(k) plan
- RRIF – Registered Retirement Income Fund
- RRSP – Registered Retirement Savings Plan
- SEP IRA – Simplified Employee Pension individual retirement account
- SEPP – Substantially equal periodic payments
- SIMPLE IRA – Savings Incentive Match Plan for Employees individual retirement…
- SIPP – Self-invested personal pension