Why a Roth IRA Could be Smart Strategy in Retirement?

February 20, 2026

Are you looking for ways to manage taxes more effectively in retirement? A Roth IRA can be a powerful tool for doing just that. With the potential for tax-free growth and tax-free withdrawals for both you and your beneficiaries—assuming the rules are followed—a Roth IRA offers benefits that go well beyond basic retirement saving.

That said, Roth IRAs do come with income limits. If your modified adjusted gross income (MAGI) exceeds IRS thresholds, you may not be eligible to contribute directly. However, higher earners may still be able to access Roth benefits by converting assets from a traditional IRA or certain employer-sponsored retirement accounts. This strategy comes with tax considerations and should be approached carefully.

Below are some of the key advantages that make Roth IRAs appealing for many savers.

1. Tax-free growth and tax-free withdrawals

Roth IRA contributions are made with money you’ve already paid taxes on, so there’s no upfront deduction. The tradeoff is that qualified withdrawals—including investment earnings—are not subject to federal income tax and may also avoid state and local taxes, depending on your location and circumstances.

2. No required minimum distributions for the original owner

Unlike traditional IRAs and most employer-sponsored retirement plans, Roth IRAs do not require you to take required minimum distributions (RMDs) during your lifetime. This allows your money to remain invested longer if you don’t need it for living expenses and can simplify retirement income planning.

3. Potential estate planning advantages

Roth IRAs can be a useful component of a broader legacy strategy. While beneficiaries are typically required to take distributions from inherited Roth IRAs, those withdrawals are generally tax-free. Because estate planning rules can be complex, it’s wise to consult a qualified attorney or advisor before relying on a Roth IRA for inheritance planning.

4. Greater flexibility when managing retirement income

Since taxes have already been paid on Roth contributions, qualified withdrawals don’t increase your taxable income. By drawing strategically from taxable accounts, traditional retirement accounts, and Roth IRAs, you may be able to better control your tax bracket and overall tax liability in retirement.

5. May help limit exposure to surtaxes

Qualified Roth IRA withdrawals do not count toward MAGI calculations used to determine certain surtaxes, such as the Net Investment Income Tax (NIIT). In contrast, RMDs from traditional IRAs and pre-tax workplace plans are included in MAGI and may push retirees over surtax thresholds.

6. Protection against future tax increases

No one can predict future tax rates, but today’s rates are relatively low by historical standards. If tax rates rise down the road, having assets that can be withdrawn tax-free could provide valuable flexibility.

7. Access to contributions at any time

One unique feature of Roth IRAs is that you can withdraw your original contributions at any time, for any reason, without taxes or penalties. Restrictions generally apply only to earnings and converted amounts. Withdrawals are typically treated as coming from contributions first.

8. Contributions can continue as long as you’re working

There is no age limit on Roth IRA contributions. As long as you have earned income—whether from wages or self-employment—you may continue contributing, provided your income falls within IRS limits.

9. Roth accounts may favor younger earners

For individuals early in their careers, current income and tax rates may be relatively low compared to what they could be later in life. In those cases, paying taxes now in exchange for tax-free income in retirement can be especially appealing.

If your income is too high to contribute directly

Direct Roth IRA contributions require earned income and adherence to IRS income limits. If you earn above those limits, converting funds from a traditional IRA may be an alternative. While conversions typically trigger taxes on pre-tax amounts, future qualified withdrawals from the Roth account can be tax-free. Because conversion rules can be complex—particularly when after-tax contributions are involved—it’s best to consult a tax professional before proceeding.

The decision often comes down to taxes

A Roth IRA can be beneficial at many stages of life, but it isn’t the right choice for everyone. Understanding how it fits into your broader tax and retirement strategy is key to deciding whether it makes sense for you.

Sources:

https://www.fidelity.com/learning-center/personal-finance/retirement/nine-reasons-roth

Disclosure:

This information is an overview and should not be considered as specific guidance or recommendations for any individual or business.

This material is provided as a courtesy and for educational purposes only.

These are the views of the author, not the named Representative or Advisory Services Network, LLC, and should not be construed as investment advice. Neither the named Representative nor Advisory Services Network, LLC gives tax or legal advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. Please consult your Financial Advisor for further information.