Explore the tax benefits of a Roth IRA

With a Roth IRA, you'll pay taxes on the money going into your account, and then all qualified withdrawals are tax-free.1

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What is a Roth IRA? 

A Roth Individual Retirement Account, or Roth IRA, is an investment account that helps you save for retirement and reduce taxes. Contributions and earnings in a Roth IRA grow tax-free. Contributions can be withdrawn anytime without taxes or penalties. Withdrawals of earnings are tax-free if you’re at least age 59 ½ and made your first contribution at least 5 years ago.

Is investing in a Roth IRA account right for me?

A Roth IRA can be a good option for you if you value flexibility now and in retirement.

Tax savings

Investments grow tax-free and your withdrawals are tax-free in retirement.

Flexible money

Withdraw contributions anytime without taxes or penalties.

Simple qualifications

You only need to earn income below IRS limits to qualify

Other benefits include:

  • No age limits
  • No required minimum distributions
  • No taxes for beneficiaries

What is the difference between a Roth IRA and Traditional IRA?

The main difference between a Roth IRA and Traditional IRA is taxation. 

Roth contributions are not tax deductible and can’t lower your taxable income. Yet Traditional contributions are tax deductible.

Taxation of withdrawals also differ. Roth withdrawals are tax-free if you’re at least age 59 ½ and made the first contribution at least 5 years ago. Traditional withdrawals – including contributions and earnings - are taxed.

Why contribute to a Roth IRA?

You won't pay taxes on qualified withdrawals in retirement.

  • Contributions are not tax deductible
  • Eligibility is based on how much you earn 
  • Never pay taxes on qualified withdrawals if you’re at least age 59½ and made your first contribution at least five years ago
  • Withdrawals are never required
  • Access contributions at any time tax-free
  • Combined Roth and traditional IRA contribution limits in 2024: $7,000, or $8,000 if you're age 50+

What about a Traditional IRA?

Your potential earnings will grow tax-deferred.

  • Contributions may be tax deductible
  • Anyone with earned income can contribute
  • Pay no taxes until money is withdrawn
  • Withdrawals are required by age 731
  • Combined Roth and traditional IRA contribution limits in 2024:  $7,000, or $8,000 if you're age 50+

Consider the benefits of a Roth IRA conversion

You can roll over most retirement plans into a new Roth IRA. But what is a Roth IRA conversion? This is when you roll over or "convert" funds from non-Roth accounts, such as traditional IRAs, 403(b)s, and 401(k)s, into a new Roth IRA. You pay taxes when you complete your conversion, but you can withdraw your money tax-free in retirement if you are at least age 59 ½ and made your first contribution at least five years ago. For detailed steps, visit our IRA rollover guide.

Conversion benefits Things to consider:
  • Receive tax-free earnings in retirement
  • Keep funds in a retirement account as long as possible
  • Leave tax-free assets to your family and your heirs
  • Money converted today is taxed at your current income tax rate
  • Anyone can convert retirement savings to a Roth, regardless of income

What makes TIAA IRAs different?

Our IRAs can help complement your workplace plan and offer a variety of benefits to move you toward your retirement goals.

A wide array of investments

Gain access to a variety of investment choices, including mutual funds, stocks, bonds, annuities and more.

Lifetime income with flexible options

Build your portfolio to pursue your retirement needs, with options that include guaranteed growth and lifetime income.2

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Advice and support

We offer complimentary advice and support to help you figure out which investment strategy may be right for you.3

Am I eligible for a Roth IRA?

Yes, you’re eligible for a Roth IRA, in 2024, if you earned less than $161,000 and file taxes alone or $240,000 and file jointly.

Are Roth IRA withdrawals tax-free?

Yes. Withdrawals of contributions are always tax-free. Withdrawal of earnings are tax-free if you made your first contribution at least five years ago and one of these characteristics applies to you:

  • You're older than 59½.
  • You're permanently and totally disabled.
  • You’re buying your first home (and meet related qualifications).
  • After you die, a beneficiary receives a distribution from the IRA or your estate.

What if I’ve had my Roth less than five years and need to withdraw my funds?

Contributions can be withdrawn anytime tax- and penalty-free. However, earnings must be held five years before withdrawals are tax-free, regardless of age. Please consult your tax advisor for your situation.

Open a Roth IRA today

Open, fund and invest in a Roth IRA.

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1Withdrawals of earnings prior to age 59½ are subject to ordinary income tax and a 10% penalty may apply. Earnings can be distributed tax free if distribution is no earlier than five years after contributions were first made and you meet at least one of the following conditions: age 59½ or older or permanently disabled. Beneficiaries may receive a distribution in the event of your death. For governmental 457(b) plans, withdrawals are only allowed following separation from service or when you reach age 73. Your RMD Applicable Age was 70 ½ if you were born before 7/1/49; 72 if you were born on or after 7/1/49 or in 1950; 73 if you were born between 1951 and 1958; 75 if you were born in 1960 or later. If you were born in 1959, federal guidance is needed to determine if your RMD Applicable Age is 73 or 75.

2Any guarantees under annuities issued by TIAA are subject to TIAA's claims-paying ability.

3Some IRAs may be eligible for support only, and not advice services. Advice services use a methodology from an independent third party.

This material is for informational or educational purposes only and is not fiduciary investment advice, or a securities, investment strategy, or insurance product recommendation. This material does not consider an individual’s own objectives or circumstances which should be the basis of any investment decision.

Before rolling over or consolidating assets, consider your other options. You may be able to leave money in your current plan, withdraw cash or roll over the assets to your new employer's plan if one is available and rollovers are permitted. Compare the differences in investment options, services, fees and expenses, withdrawal options, required minimum distributions, other plan features, and tax treatment. Speak with a TIAA consultant and your tax advisor regarding your situation. Learn more at TIAA.org/reviewyouroptions.Opens in a new window

Certain securities may not be suitable for all investors. Brokerage Services are provided by TIAA-CREF Brokerage Services, a division of TIAA-CREF Individual & Institutional Services, LLC.

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