Hi friends. Thanks for downloading the Money Girl Podcast. I'm Laura Adams.

If you're a regular on this podcast, you already know that you should be saving for retirement.

But sometimes it seems difficult to get started because you have to make some important decisions,

like what type of retirement account to use.

This is the first episode in a two-part series about the Roth IRA. Today we'll cover what it is, who can have one, and the

withdrawal rules. Then in part two, you'll find out when you should opt for a Roth IRA.

The types of investments a Roth is ideally suited for

and where to get one.

IRA is short for individual retirement arrangement and it's a special kind of

account that allows you to save and invest for retirement while getting some very nice

tax breaks.

There are two main types, a traditional IRA and a Roth IRA.

When you contribute money to a traditional IRA, it's generally tax deductible.

That means you don't pay tax on the money you put in the account, which lowers your tax bill

in the current year.

Instead, you're allowed to defer taxation on both contributions and earnings until you make a

withdrawal during retirement.

With a Roth IRA, you have to pay tax up front on your contributions.

However, the account grows completely tax-free.

That means you never pay tax on your investment earnings

when you pull money out during retirement.

There are other differences between these accounts,

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