It has plenty of advantages, but it's not for everybody.

Here's what Houston Financial Advisors Richard J. Alphonso, JD, CPA, M.S.T., and Randy Scott, CPA, say you should know about the Roth IRA:

• To contribute to a Roth IRA, your AGI can’t exceed $95,000 (for single filing) and $150,000 (for joint filing). No contributions are allowed once AGI levels exceed $110,000 and $160,000 for single and joint filers, respectively.
• You can fund it with anywhere from $2,000 to possibly millions of dollars.
• Funds can grow tax-free.
• You can withdraw funds tax-free as long as the fund has existed for 5 years and distributions are taken after age 59 1/2 (unless you die, become disabled or qualify as a first-time home buyer).
• You aren’t required to make distributions during your lifetime, as with traditional IRAs.
• You're limited to an annual $2,000 contribution.
• Although you can convert a traditional IRA of any amount to a Roth, you must pay income tax on the funds you transfer.