What is a Roth IRA, and why do so many people love it? In this episode, Deanne Rosso and wealth adviser Clarke Holt explain how a Roth IRA works, why tax-free growth can be so valuable, and what to know before opening one.

Hey there, I'm Deanne Rosso with Elevate Wealth Advisory. I'm happy to be here today and I'm happy to be joined by Clarke Holt, Wealth Adviser from Elevate. Hey there, Clarke. So, Clarke, in simple terms, what is a Roth IRA?

So, a Roth IRA is a retirement account that individuals can set up. After tax dollars go into the account. So, you've already paid taxes. The beauty of it is the growth is tax-free all along the way and the money comes out tax-free.

Oh wow.

So that's one of the biggest benefits and that's why we love Roth IRAS.

Okay. Tax-free. We like that. That's really great. That's amazing. And is that why people love them?

It is. I mean that's it. The gist is you get the tax-free growth. All that's deferred, but when the money comes out it is completely tax-free as long as you go by the...there's some rules and limitations you have to go by, but it is a probably one of our favorite accounts.

Yeah. So, what's the main thing that people should know before they open one?

There are contribution limits. There are income thresholds. There are certain rules you have to go by to make sure that tax-free withdrawal is legitimate. And so, there's certain things you want to be aware of for sure. And once you get through that, it's probably...and starting early is also important. So, we just we love Roth IRAs. And it's a great way to fill up that third tax bucket. And that kind of gives you some diversification as far as the different withdraw taxation rules as money's coming out of your different retirement plans.

Yeah. So, if you want to get the benefit, you got to play by the rules. I mean, I think that's really important to know. I think that a Roth is an account that almost everyone should have in part of their retirement arsenal, if you will. So, thank you for explaining that to us today.

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