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Deciding to save for retirement now could help you have a more secure future. Figuring out how to do it, on the other hand, can be a bit confusing. How do you determine what’s best for you and your goals?

If you're assembling a retirement savings toolbox to build your post-work life, a Roth IRA may help. Here’s how to start a Roth IRA, how much you can contribute to a Roth IRA, and more.

What is a Roth IRA?

A Roth individual retirement account (IRA) is an after-tax retirement savings account. Why after tax? You create and add to a Roth IRA with money that’s already been taxed. But that means that both growth and withdrawals when you take a qualified distribution are not taxed.  If you think you might be in a higher tax bracket in retirement, saving in a Roth IRA now may be extra advantageous.

While tax-free withdrawals and growth are great, Roth IRAs offer several other benefits. Those include:

• access to a range of potential investment options,
• ability to consolidate other retirement savings accounts into a Roth IRA,
• opportunity to create a diverse savings plan, if you’re also part of an employer-sponsored retirement plan like a 401(k) or 403(b),
• option to convert other retirement savings into a Roth IRA,
• a flexible withdrawal strategy in retirement, and
• tax-free withdrawals for heirs if a Roth IRA is part of an estate plan.

In addition, if you’re married and your spouse isn’t employed or doesn’t make enough to set up a Roth IRA, you can set up a spousal Roth IRA for them.

How can you start a Roth IRA?

It’s key to understand two things before you start a Roth IRA:

1. You must have earned income—meaning, you must still be employed, either full or part time.
2. You must be under .

Roth IRA limits

How much can you contribute to a Roth IRA?

There are combined contribution limits for both traditional IRAs and Roth IRAs based on your age. Those often change year to year, but for 2023 they are:

• $6,500 for those under age 50, and
• $7,500 for those age 50 or older.

When can you take money out of a Roth IRA?

Two important considerations influence when you can withdraw from a Roth IRA:

1. You must have had the account for more than five years.
2. You must be at least age 59½.

If you withdraw funds earlier than age 59½ or before the Roth IRA account is five years old, you may face both early withdrawal penalties and taxes. However, unlike 401(k)s, 403(b)s, and traditional IRAs, there’s no required minimum distribution (RMD) once you retire. In fact, you don’t ever have to withdraw money from a Roth IRA.