Taxpayers contributing to and receiving distributions from a Roth IRA generally earn a before-tax rate of return on their contributions equal to their after-tax rate of return.

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Contributions to a Roth IRA are made with after-tax dollars, meaning that the contributions themselves do not provide a tax deduction. However, the earnings and withdrawals from a Roth IRA are typically tax-free, as long as certain requirements are met. Therefore, taxpayers who contribute to and receive distributions from a Roth IRA generally earn the same rate of return on their contributions whether it is calculated before or after taxes.

Taxpayers Contributing to and Receiving Distributions from a Roth IRA