In U.S. personal finance, the retirement account allowing tax-free qualified withdrawals after after-tax contributions is a Roth IRA.
A Roth IRA is an individual retirement arrangement established under U.S. tax law. Contributions are made with money that generally has already been included in taxable income, so contributions themselves are not normally deductible. Subject to applicable rules, qualified distributions of contributions and earnings can be tax-free.
The account is named after Senator William Roth of Delaware, who sponsored the legislative provision that created it. Roth IRAs differ from traditional IRAs, where eligible contributions may be deductible and withdrawals are generally taxed as income.
Tax-free treatment is not automatic for every withdrawal. Rules concerning age, account holding periods, conversions, earnings, and exceptions matter. Roth IRAs also have income-eligibility and annual contribution rules that can change, so current IRS guidance is important when making a contribution or planning a distribution.