Under a Roth IRA you're taxed when you contribute to the fund, but when you withdraw your funds it is untaxed. It makes sense for those who believe they'll be facing higher tax rates in the future; I'm young and expect to have substantial growth as a professional, so it makes sense. The yearly contribution max is $5,500 right now. Not sure what the average rate of return is.
Interesting, the Roth sounds identical to the Canadian Tax-Free Savings Account (TFSA), which has a CAD$5,000 maximum yearly contribution, and exempts all earnings from tax. However, more or less anything can be placed in the TFSA umbrella/wrapper/container - stocks, bonds, cash, bank accounts, ETFs, etc etc etc. Also, that 5k/yr limit is retroactive to 2009, so I've got a good amount of contribution room waiting for me when it's time to invest. :D Thanks Government of Canada!