Well I think this is one of the best retirement savings options allowed by the tax department. It is especially beneficial to middle income Americans, specifically those earning less than $95,000 per year.

This is how it works. You earn the money, you pay the taxes owed on the earned income, and you invest what is left in a Roth Ira. Now that Roth Ira will earn money for the whole length of time that you have it, and when you take money out, you get to take all of it 'TAX FREE'. Yes, you read that right! I said 'TAX FREE'. That's the original amount you put into the Roth Ira (because you have already paid the taxes on that), PLUS the interest it earned over that period of time.

If you think that you 'll be in a higher tax bracket when you retire, and losing the tax break a standard Ira would give you in the tax year is not to much of a hardship, then this is the way to go. Remember that you will have to pay taxes on the original contribution, plus any interest earned, when you take a withdrawal from a standard Ira.

There are, of course, rules. Like the five year rule. You must keep a Roth Ira for five years before you can withdraw from it or you will pay a 10% early withdrawal fee and you must be 59.5 years old 'and' have the Roth Ira for five years, to benefit from the tax free money.

You and your spouse can also file jointly, and your combined upper income limit is $150,000

There is what is called a phase out level. For a single filer that would be income of 95,000-110,000 and for joint filers it is 150,000-160,000. After your income has reached the lower limit, the amount you can contribute becomes less.

A Roth Ira contribution is allowed at any age and there is no minimum amount you must contribute so it makes for an excellent savings vehicle for young couples just starting out.