Have you thought about opening a Roth IRA?

You can open a Roth IRA if you are single and your income is $95,000 or less. or if you are a couple and your income is $150,000 or less. You can deposit up to $2,000 per year into a Roth, using after-tax dollars.

You may ask what are the drawbacks to a Roth IRA? Well, there is nothing free in life and certainly not with the IRS. So, unlike a regular IRA, contributions to a Roth are not tax deductible. A Roth won't allow you to lower your taxes immediately unlike a traditional IRA, and that is the price that you have to pay.

But a Roth allows you to keep all earnings free of any federal income taxes now or later. Unlike a traditional IRA, you never have to pay any taxes on any earnings in your Roth IRA.

Not having to pay any taxes can be particularly advantageous if you invest for the long term and you have a large gain on your investments.

Unlike a regular IRA or other retirement account you do not have to make withdrawals at set times. If you have enough income during your retirement years, you can leave the investments intact to continue to grow. That's very different from a regular IRA where you have to start taking out the money at age 70 - or you pay penalties to the IRS.

Another big benefit to the Roth IRA is that you can pass the money in the Roth IRA to your children or other heirs. They also won't have to pay taxes on the income from the Roth.

Your heirs will have to make minimum withdrawals, but they can stretch out the withdrawals based upon their life expectancy while the balance of the plan will continue to grow tax-free.

So a Roth IRA can be a very powerful and tax-effective part of your savings and estate planning program.