Retirement solutions
Meet the Roth IRA:
Discover How It Can Help With Your Retirement
Round out your retirement investment strategy.
Pay taxes upfront. Later, you may enjoy potential gains tax-free—and a more flexible withdrawal policy.1
Get the scoop on Roth IRAs
The Roth individual retirement account (IRA) is the yin to the Traditional IRA yang. A major difference? With a Roth IRA, you pay taxes now on the money you contribute. But you can make withdrawals tax-free on earnings generally once you reach age 59½ and you have held the account at least five years.2
Traditional IRAs are usually the reverse: Usually, you pay taxes on withdrawals. Both can be key pieces in your retirement strategy.
You’ve selected your vehicle.
Now get the right engine to power your IRA.
Simplify account setup
Get a recommendation for a T. Rowe Price Retirement Fund based on your age and investment amount with a ReadyChoice IRA.
Choose your own adventure
Are you a DIY’er? You may enjoy using our curated lineup of offerings, Select Funds —screened for performance and expense ratios.
Go for 1:1 advice
For clients with $250,000 or more, the Retirement Advisory Service offers a tailored plan and access to an advisor.
A Roth IRA may be the right choice if you:
- Expect to be in a higher tax bracket after retirement
- Worry about paying taxes on mandatory distributions from other retirement accounts
- Need more flexibility on withdrawals
- Want an opportunity to leave assets tax-free for the next generation
In some cases, they may fit together
Pair them to make a dynamic duo.
Yin and yang. Who can say which is better?
In life, you can benefit from both.
| Description | Roth IRA | Traditional IRA |
|---|---|---|
| Tax treatment | Contribution dollars are after-tax Withdrawals are tax-free after 5 years and if you are at least 59½ years old2 |
You may be eligible to deduct all or a portion of your contributions. Deductibility depends on your income, filing status, whether you and/or your spouse are covered by a retirement plan at work, and whether you receive social security benefits. |
| Contribution eligibility | May contribute if modified adjusted gross income (MAGI) does not exceed income limitations. You must have U.S. earned income. |
No age or income restrictions as long as you have qualified earned income |
| Withdrawal | No required minimum distributions | Required minimum distributions after age 73 |
| Flexibility | Withdraw your original contributions anytime without penalty; any early withdrawals of investment gains may incur taxes and penalties | Any early withdrawals may incur taxes and penalties |
| Bottom line | Pay taxes now and give potential for money to grow, tax-free | Take a tax benefit now and defer paying taxes until you begin withdrawals |
Get started
Ready to open an account?
Wonderful! We’ll walk you through the process.
When it comes to your account security, we’re committed to safeguarding your personal information. Set aside about 10 minutes.
The T. Rowe Price difference.
When you invest directly, you’ll discover a world that focuses on keeping your expenses low so that more of your money works for you.
Sales Commissions
0%
Our associates are salaried professionals with no sales commissions or quotas—so you can be confident that your needs come first.
Value oriented
90%+
More than 90% of our funds for individual investors have gross expense ratios below their peer category average.3
Performance
95%+
Over 95% of our Retirement Funds with a 10-year track record beat their 10-year Lipper average as of 3/31/2024.4
The performance data shown is past performance and is no guarantee of future results. All investments are subject to risk, including the possible loss of principal. Results from other time periods may differ. Active investing may have higher costs than passive investing and may underperform the broad market or passive peers with similar objectives. Passive investing may lag the performance of actively managed peers as holdings are not reallocated based on changes in market conditions or outlooks on specific securities
View standardized returns and other information about the T. Rowe Price funds. (PDF)
(1) An IRA should be considered a long-term investment. IRAs generally have expenses and account fees, which may impact the value of the account. Maximum contributions are subject to eligibility requirements. Non-qualified distributions may be subject to taxes and penalties. For more detailed information about IRAs, consult IRS Publication 590-A, IRS Publication 590-B or a tax professional regarding personal circumstances.
(2) A qualified distribution from a Roth IRA is tax-free if taken after the 5-year period beginning with the first tax year for which a Roth contribution was made and you’ve reached age 59½, become disabled, died or meet the requirements for a first time home buyer.
(3) 140 of 153 of our Investor Class funds (excludes funds not available for direct purchase) more than 6 months old had gross expense ratios below their Lipper averages based on fiscal year-end data available as of 3/31/2024. (Source for data: Lipper Inc.)
(4) 36 of our 56 Retirement Funds had a 10-year track record as of 3/31/2024 (includes Investor, I Class, Advisor, and R Class Shares). 35 of these 36 funds (97%) beat their Lipper average for the 10-year period. 42 of 42 (100%), 24 of 42 (57%), and 38 of 39 (97%) of the Retirement Funds outperformed their Lipper average for the 1-, 3-, and 5-year periods ended 3/31/2024, respectively. Calculations are based on cumulative total return. Not all funds outperformed for all periods. (Source for data: Lipper Inc.)
The principal value of the Retirement Funds is not guaranteed at any time, including at or after the target date, which is the approximate year an investor plans to retire (assumed to be age 65) and likely stop making new investments in the fund. If an investor plans to retire significantly earlier or later than age 65, the funds may not be an appropriate investment even if the investor is retiring on or near the target date. The funds’ allocations among a broad range of underlying T. Rowe Price stock and bond funds will change over time. The funds emphasize potential capital appreciation during the early phases of retirement asset accumulation, balance the need for appreciation with the need for income as retirement approaches, and focus on supporting an income stream over a long-term postretirement withdrawal horizon. The funds are not designed for a lump-sum redemption at the target date and do not guarantee a particular level of income. The funds maintain a substantial allocation to equities both prior to and after the target date, which can result in greater volatility over shorter time horizons.
3460793