The following video is part of our "Motley Fool Investing Basics" series, in which Motley Fool contributor and financial planner Dan Caplinger discusses topics from around the investment world.
Today, Dan looks at Roth IRAs and why having one is a smart move. Dan notes that IRAs in general let you save for retirement in a tax-favored way, but the unique benefit that Roth IRAs offer is tax-free growth. Especially for young people, Roth IRAs often make more sense than traditional retirement accounts. Combined with other retirement saving strategies such as 401(k) plans, Roth IRAs can help you lock in a lifetime of tax benefits, which is increasingly important with higher tax rates potentially right around the corner. Dan walks you through the mechanics of opening and contributing to a Roth IRA, as well as giving some examples of stocks you want to focus on for a Roth.
Roth IRAs are a key tool toward saving for retirement, but you still need the right investments to make the most of it. In our free report "3 Stocks That Will Help You Retire Rich" we reveal some stocks that could help you as well as some winning wealth-building strategies. Click here to keep reading.