Roth IRA Rules and Contribution Limits for 2022

Joseph Meyer
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How Much Can You Contribute to a Roth IRA?

Where to Get Help Opening an Account

IRAs are retirement vehicles that allow you to invest money on a tax-deferred basis. The current suite of IRAs includes traditional IRAs, Roth IRAs, SIMPLE IRAs, SEP IRAs, and Rollover IRAs, which are all available in a variety of accounts, such as CDs, mutual funds, stocks, bonds, and exchange-traded funds.

In years past, there were several different account types for IRAs, including individual retirement accounts and custodial IRAs. However, the recent tax code overhaul has eliminated many account types and simplified the tax reporting rules for IRA accounts.

How Roth IRAs Work

A Roth IRA is a type of individual retirement account set up to help people save for retirement. One of the most attractive things about Roth IRAs is that the future tax implications of funding it are not immediately evident. There’s no specific tax deadline date since you are funding it with after-tax dollars, and you may not be taxed at all if you meet the eligibility criteria from this article.

Roth IRAs have been named after Senator William V. Roth Jr., who introduced the legislation creating Roth IRAs in 1997. Roth IRAs enable individuals to grow their retirement savings tax-free, provided they meet IRS-established criteria.

The Roth IRA has existed longer than Roth 401(k)s, which came into play in 2