Originally published March 2016. Last updated March 2026.
A Roth IRA is one of the best retirement savings tools available. Your contributions grow tax-free, your withdrawals in retirement are tax-free, and you’re never forced to take required minimum distributions. That’s a rare combination.
Here are three ways to make a Roth IRA work hard for you.
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1. Start Early and Let Compounding Do the Work
Roth contributions are more powerful the earlier you make them, because all the growth is tax-free.
If you contribute $7,000 to a Roth IRA at age 30 and earn an average 8% annual return, that single contribution grows to about $33,000 by age 50 and $72,000 by age 60. Every dollar of that growth comes out tax-free.
If you wait until age 50 to contribute the same $7,000, it only grows to about $15,000 by age 60. Same money, less time, dramatically different result.
The 2025 contribution limits: $7,000 if you’re under 50, $8,000 if you’re 50 or older. Max it out every year if you can.
2. Use Your Roth Strategically in Retirement
In retirement, having both traditional (pre-tax) and Roth (after-tax) accounts gives you control over your tax bracket.
Here’s how that works in practice:
- In a year when you have higher income (maybe you sold a property or had a big capital gain), draw more from your Roth to avoid stacking taxable income
- In a low-income year, draw from your traditional IRA and pay taxes at the lower rate
- Use Roth withdrawals to stay below Medicare premium surcharge thresholds (IRMAA)
- Keep your Social Security taxation under control (up to 85% of benefits can be taxable depending on your “combined income”)
Because Roth IRAs have no RMDs during your lifetime, the money you don’t need can keep growing tax-free indefinitely. That makes Roth assets among the best to leave to heirs, too.
3. Consider a Roth Conversion
If your income is too high to contribute directly to a Roth (2025 income limits: $150,000 for single filers, $236,000 for married filing jointly), you have two options:
Backdoor Roth IRA: Contribute to a non-deductible traditional IRA, then convert it to a Roth. There’s no income limit on conversions. Be aware of the pro-rata rule if you have other pre-tax IRA balances — you’ll owe taxes on a proportional share of the conversion.
Direct Roth conversion: Move money from a traditional IRA or old 401(k) into a Roth. You’ll pay income tax on the converted amount, but it then grows tax-free forever.
The best time to convert is often the years between retirement and when RMDs start (age 73 or 75). Your income is usually lower, which means you’re converting at a lower tax rate. We routinely see clients save $5,000-$30,000 per year in long-term taxes through well-timed Roth conversions.
2025 Roth IRA Income Limits
- Single filers: Can contribute fully if MAGI is under $150,000; phases out between $150,000-$165,000
- Married filing jointly: Can contribute fully if MAGI is under $236,000; phases out between $236,000-$246,000
Above these limits, use the backdoor Roth strategy.
FAQ
Can I withdraw my Roth contributions at any time?
Yes. You can always withdraw your original contributions (not earnings) from a Roth IRA at any age, without tax or penalty. That makes it a decent emergency backstop, though we’d suggest keeping a separate emergency fund instead.
What’s the five-year rule?
To withdraw earnings tax-free, your Roth must be open for at least five years and you must be 59 and a half or older. Each Roth conversion also has its own five-year clock for penalty-free access to the converted amount (but not for tax purposes if you’re over 59 and a half).
Is a Roth IRA better than a traditional IRA?
Neither is universally better. If you’re in a low tax bracket now and expect a higher one later, Roth wins. If you’re in your peak earning years and expect lower income in retirement, traditional may save you more. Ideally, you have both.
Schedule a free 20-minute consultation to talk through whether a Roth IRA or Roth conversion makes sense for your situation.
R.L. Brown Wealth Management
106 W Vine St, Suite 300, Lexington, KY 40507
859.317.5889
