Roth IRA refers a type of individual retirement plan that offers a number of tax-saving advantages if a number of terms are met.

Contributions to Roth IRAs are not tax deductible, and although annual deposit maximums apply, earnings in Roth individual retirement accounts are tax-free, and funds may be withdrawn forever tax-free.

In order to qualify, though, a number of terms must apply. The first distribution must come at least five years after the accounts was set-up, and when the account holder is at least fifty nine and a half years old (exceptions apply if the holder is disabled, withdrawals are to purchase a first home, or the holder has died).