LeoGlossary: Roth IRA

An individual retirement account (IRA) under United States law that is not taxed upon distribution. All contributions are taxed unlike Traditional IRAs. This means the growth is tax-free.

It was named after Senator William Roth.

Eligible securities for Roth IRA investment are:

• stocks
• bonds
• certificates of deposit (CD)
• derivatives
• notes

For distributions to be tax-free, one has to be 59 1/2.

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