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How Does a Roth IRA Work?

With the right investments, these popular retirement accounts could make you a fortune.

By Kailey Hagen – Updated Nov 7, 2024 at 5:05PM

Key Points

  • Roth IRAs offer tax-free growth; contributions are taxed upfront, benefiting those who expect to be in the same or a higher tax bracket in the future.
  • You can invest Roth IRA funds in stocks, bonds, mutual funds, ETFs, and more, but not in real estate or precious metals.
  • Choose a Roth IRA custodian wisely to ensure you have access to the investment options you want and aren't paying too much in fees.
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