• Roth IRA accounts were established by the Tax Payer Relief Act of 1987 in hopes to help investors save toward retirement. The Roth IRA set forth a new way to approach retirement savings. Where the traditional IRA defers all contributions and earnings until distributions are made, the Roth gains no tax deduction when deposits are made and allows the principal and earnings to grow tax free.
  
  

Income Limits to Contribute

• In order to make a deposit, also known as a contribution, into a Roth IRA, the IRA owner must fall within the income guidelines set by the IRS. As of 2010, those filing tax returns as single or head of household must make less than $105,000 to make a full contribution into the Roth IRA. Those making between $105,000 and $120,000 can contribute but can only make a partial contribution depending on the exact income amount. Couples filing joint tax returns must earn less than $167,000 in order to make a full contribution and no more than $177,000 to make at least a partial contribution.
  
  

Contribution Limits

• As of 2010, the IRS allows you to contribute no more than $5,000 of earned income into a Roth IRA. If you have not made more than $5,000 in income, your maximum contribution is 100% of your earned income. Those who are over the age of 50 are allowed to save more. This is referred to as a "catch up contribution" by the IRS. Those over 50 are allowed to contribute an additional $1,000 annually. Beyond 2010, contribution limits will be increased based on a cost-of-living adjustment.
  
  

Investment Options

• Contributions into a Roth IRA can be invested into any number of investment options. The IRS allows IRAs to hold within the account bank investments, securities such as stocks and bonds as well as less commonly used retirement investments. The less common investments include real estate, precious metals and private stock. The custodian must allow the investment; the IRS doesn't tell custodians what investments they can monitor since each investment has its own administrative responsibilities.