Someone help me define what a Roth IRA is??

[SubaruSTiMike]

Ok, I've been researching about Roth IRA and read a few threads. I've read on wikipedia and other forums on their definition because many people ask about it, but I still have some questions. It's suppose to be an Individual Retirement Account, so if I put money into a Roth IRA, does the money grow? What exactly am I investing in? I've read it's a mutual fund, and others say it's a combination of CD's, funds, stocks, etc...but what is it? Is it JUST an account where it's tax exempted that I myself have to allocate the funds to the investments I want to make? Or is it just like any other fund where I put money in, it gets invested in a variety of things, and I get the return? If so, then what is the investments is the Roth IRA putting my money in?? I'm very confused...

I ask this because I remember reading a thread about if I put in the maximum amount of money allowed for a few years I'd have a lot when I retire. If that's the case, then it means the the IRA gives you a return without you having to allocate money into other investments? But now I'm reading you have to put in the money and buy investments?

If the IRA is just a retirement account that holds your money that you invest, I can only see a few advantages like helping your self control of wanting to withdraw the money, and being tax exempted when you withdraw at the age minimum.

The disadvantages I see is if you are actively investing you can't take the gains from your investments and put it somewhere else?


Thanks.