Roth IRA
A retirement account with tax-free withdrawals later.
A Roth IRA is a US individual retirement account where you invest money you have already paid tax on. In return, qualified withdrawals in retirement are tax-free, growth included.
The rules in brief
There is a yearly contribution limit set by the IRS, and income limits on who can contribute directly. Withdrawals of earnings are tax-free once you are 59½ and the account has been open at least five years. Your own contributions can generally be taken out at any time.
Why DCA investors like it
Monthly buys into a broad index fund inside a Roth can grow for decades with no tax on the gains. For younger investors who expect higher income later, that can be very valuable.