A Roth IRA flips the tax equation—you pay taxes on the money before contributing it, but then your withdrawals in retirement are completely tax-free if you meet certain criteria. This includes both your original contributions which have already been taxed and all the growth over the years.

Roth IRAs are particularly powerful for younger earners who are likely in lower tax brackets now but expect higher earnings (and taxes) later. There's no required minimum distribution, so you can let the money keep growing. You can even withdraw your original contributions (not earnings) tax and penalty free before retirement if needed. If you believe taxes will be higher in the future or want maximum flexibility, a Roth IRA deserves serious consideration.