Understanding the key differences can help you choose the right account type for your financial goals.
Roth IRA accounts
- Contributions are made with after-tax dollars, but qualified withdrawals in retirement are completely tax-free, including all investment growth
- Contribution limits of $7,000 per year ($8,000 if you're 50 or older) for 2025
- Income limits may reduce or eliminate your ability to contribute directly
- Original contributions can be withdrawn at any time without penalties, but earnings withdrawn before age 59½ may be subject to taxes and penalties unless you qualify for an exception
Standard investment accounts
- No upfront tax advantages - you'll pay taxes on dividends, interest, and capital gains
- No contribution limits - you can invest any amount at any time
- Available to everyone regardless of income level
- Access your money anytime without age-based penalties
Illuminate currently offers individual taxable brokerage accounts, with Roth IRA and Traditional IRA accounts coming soon.