What is an IRA?

IRA stands for “Individual Retirement Account.” A Roth IRA is the default IRA set up by employers participating in the Minnesota Secure Choice Retirement Program for all their eligible full-time and part-time employees. A Roth IRA is then funded by a saver’s contributions with after-tax dollars (deducted from their paycheck by their employer’s payroll team in this case) meaning the saver doesn’t get a tax deduction on their contributions. The primary advantage for savers is that investments grow interest tax-free and a saver can make qualified withdrawals completely tax-free if they are 59.5 years-old or older and have had the account for at least 5 years. Savers can also recharacterize their Roth IRA to a Traditional IRA.