(LifeWire) - Definition: A Roth IRA is a form of an individual retirement account. You'll owe income taxes on contributions in the year in which they are made. After that, though, there are no more taxes on Roth IRA money for life, as long as you follow some simple rules.
Contributions can be withdrawn at any time because taxes have already been paid on them. But you must wait at least five years to withdraw any growth, and you'll face a 10% penalty on those withdrawals before age 59 1/2, plus taxes.
As of 2008, contributions are limited to $5,000 a year, or $6,000 if you're over 50. Those with incomes higher than $101,000 for singles or $159,000 for couples may face restrictions on contributing.
