Which of the following statements is TRUE regarding a Roth IRA?

A Roth IRA is indeed a retirement savings account that can only be funded with after-tax income. This means that contributions to a Roth IRA are made with money on which you have already paid income taxes. As a result, qualified withdrawals during retirement are tax-free, making this type of account appealing for many investors looking to maximize their tax efficiency in retirement.

The other statements do not accurately represent the properties of a Roth IRA. For instance, while there are contribution limits based on income for Roth IRAs, there are also limits on how much one can contribute annually, which makes the assertion of unlimited contributions incorrect. Additionally, mandatory withdrawals, known as Required Minimum Distributions (RMDs), are a feature of traditional IRAs, not Roth IRAs. A key advantage of a Roth IRA is the flexibility regarding withdrawals; contributors are not required to take distributions starting at age 72 like traditional IRAs. Lastly, while contributions can be made at any age, the key requirement is that the contributor must have earned income that meets certain limits to qualify for making contributions.