For 2002, you can contribute $3,000 ($3,500 if over age 50) into a Roth IRA but unlike a traditional IRA, your contribution is NOT tax deductible. So why would anyone do this? Because your earnings grow tax-free (versus tax deferred) until you withdraw them. Other benefits include the ability to withdraw your original contributions anytime tax-free, you do NOT have to start making minimum withdrawals when you reach age 70 1/2 and you can avoid a 10% penalty on your early withdrawals of your earnings if you have them in there for at least 5 years and you are older than age 59 1/2.