This year, savvy investors are prompted to add another crucial task to their personal finance checklist: making a Roth IRA contribution. In 2024, the contribution limit stands at $7,000, with an additional $1,000 catch-up contribution permitted for those age 50 and older.

"A Roth IRA is an account that you can contribute after-tax contributions to, with investment returns, income and dividends growing tax-deferred," says Scott Krase, wealth manager at Connor & Gallagher OneSource.

A Roth IRA offers the distinct advantage of tax-free growth on dividends, capital gains and income within the account. Withdrawals can be made without penalty and tax-free after age 59 1/2, provided the account has been open for at least five years.

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This feature sets the Roth IRA apart from other retirement savings vehicles like the 401(k) and a traditional IRA, offering unique benefits for long-term financial planning.

"Roth IRAs are an attractive financial savings vehicle because investors can contribute to them regardless of age and take advantage of tax-free income in retirement, with no required minimum distribution, unlike a traditional IRA, which requires distributions at age 73," explains Tiana Patillo, financial advisor manager at Vanguard.

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To be eligible for a Roth IRA, individuals must meet specific modified adjusted gross income (MAGI) thresholds; for 2024, single filers earning less than $146,000 and joint filers earning less than $230,000 can qualify for the full contribution.

For those who qualify for a Roth IRA,........

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