The Roth IRA was introduced as a retirement investment option in 1998 as part of the 1997 Taxpayer Relief Act. It is named for Senator William V. Roth who was the major sponsor of the Act. The requirements for obtaining a Roth IRA are different from those required for a standard IRA. The options a holder has differ, as well.

In order to make an initial contribution to a Roth IRA, a single filer must have an Adjusted Gross Income (AGI) of less than $100,000. When converting from a standard IRA to a Roth, a person's AGI cannot exceed $95,000. Other major differences between Roth and standard IRAs have to do with taxes. The Roth IRA allows a person to build wealth that will remain free from income taxes even after his death. While estate taxes might have to be paid, a person's heirs will not be subject to income taxes on a Roth IRA. However, unlike a standard IRA, contributions to a Roth IRA are not tax deductible. There is also no age requirement to obtain a Roth IRA. A person can be 16 or 75. There are, of course, stipulations people of any age have to meet, but a person cannot be denied a Roth IRA based on age alone.

The Future of the Roth IRA

With social security issues making headlines, the President and Congress are looking for other options. There is a current proposal that would expand and rename the Roth IRA. Retirement Savings Accounts (RSAs) would take the place of the Roth, supposedly giving people more options in regards to their retirement investments.

While changes are being contemplated, it is still possible to get a Roth IRA in its current form. Investment firms and brokers generally offer Roth options. There are also a number of securities and investment websites that make it incredibly easy to apply for a Roth.