Introduced in 1997, earnings accrued in these accounts are tax deferred. Withdrawals from Roth IRAs account are not taxed, but the contributions to the account are not tax deductible. Withdrawals before 59 are subject to a 10% penalty, but not subject to tax. The contribution limit for people under 49 is $5,000 and the contribution limit for people 50 and over is $6,000. That limit is subject to change by Congress.
Click here to see the full list of terms in the Forbes Financial Glossary