Workers with access to a 401(k) tend to use their company-sponsored plans as retirement savings vehicles, since 401(k)s have generous annual contribution limits and open the door to employer matching dollars, otherwise known as free money for retirement. But IRAs have their benefits, too -- especially Roth IRAs.

Though Roth IRAs don't offer an immediate tax break on contributions -- they're funded with after-tax dollars -- they do offer tax-free growth on invested savings, and tax-free withdrawals in retirement. They're also the only tax-advantaged retirement savings plan that doesn't impose required minimum distributions (RMDs) on seniors upon their turning 70 1/2.

Envelope with hundred-dollar bills sticking out of it labeled Roth IRA on wooden surface next to eyeglasses

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RMDs can be a nightmare for seniors who must take them from a traditional IRA or 401(k), since they automatically create a tax obligation to the IRS. Roth 401(k) RMDs aren't taxable, but they still limit seniors who would rather leave their money to sit and grow tax-free for longer, or pass some of their wealth on to their heirs.

But there's another lesser-known feature of the Roth IRA that could wind up benefiting you in retirement: the option to keep contributing past age 70 1/2. Yet in a recent TD Ameritrade survey, only 22% of Americans knew this was possible.

If you plan to work well into your 70s, or hold down a part-time job in retirement, it pays to consider opening a Roth IRA. This especially holds true if you want more flexibility with your money down the line.

Saving for retirement after 70 1/2

The Roth IRA isn't your only tax-advantaged retirement savings option once you turn 70 1/2. If you're still employed at that point by a company that sponsors a 401(k), you can continue making contributions to that plan. But if the company you work for doesn't offer a 401(k), and you're limited to an IRA, then a Roth IRA is the only account that allows for contributions after 70 1/2 -- traditional IRAs don't permit contributions from that point on.

Furthermore, many seniors opt to work part-time in retirement, whether by consulting in their former fields, starting a business, or joining the gig economy by becoming rideshare drivers, tutors, or house-sitters. The upside of having a Roth IRA is that you'll continue to benefit from the tax-free growth your investments enjoy, all the while never having to worry about taking RMDs or having to pay taxes when you do decide to remove funds from that account.

The only catch with Roth IRAs is that they're subject to income limits that change from year to year. If you're a single tax filer whose income exceeds $139,000 in 2020, or a married couple filing jointly with an income that exceeds $206,000, the Roth IRA is off the table initially. But in those situations, you can contribute to a traditional IRA and then convert it to a Roth after the fact. You'll pay taxes on the sum you convert, but from there you'll reap the many benefits Roth IRAs offer.

The more you know about the Roth IRA, the better positioned you'll be to decide if it's the right retirement savings account for you. Remember, too, that you can spread your savings out among a few different accounts, so if you want to capitalize on the up-front tax break for funding a traditional retirement plan, you can put some money into one of those and the rest of your available cash into a Roth IRA. That way you'll lower your tax bill initially, and you'll also get more freedom and flexibility in the future.