It's easy to overlook Roth IRAs as one of the most important elements of a successful financial plan for retirement. Most people prefer to use traditional IRAs because you can get an immediate tax break that saves you money on your current-year tax bill.

However, Roth IRAs have a key element that sets them apart from most tax-favored accounts: As long as you follow the rules, you can make withdrawals of Roth IRA money tax-free in retirement, circumventing potentially thousands of dollars in taxes.

The IRS just announced increases in the amount that investors can put into a Roth IRA in 2023, potentially boosting the value of this benefit. Yet one problem with Roth IRAs is that if your income is too high, you're not allowed to make a full Roth IRA contribution. Below, you'll learn more about both provisions.

Continue reading

Source Fool.com