How does a Roth IRA work? “A Roth IRA offers investors a lot of flexibility which, in my opinion, is its biggest benefit,” says Eric Presogna, a financial planner in Erie, Pa.How is a Roth IRA different from a traditional IRA and from a 401(k)? The annual limits apply to traditional and Roth IRAs, in aggregate—meaning you can’t add more than the allowed amount to your traditional and Roth IRAs combined. High-income workers can use the “backdoor Roth” strategy to get money into a Roth IRA. How to fund a Roth IRAA Roth IRA typically needs to be funded before you can start choosing investments.

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