Retirement
beginner · $0 - $50K
Contribute after-tax dollars that grow tax-free.
Once you are 59.5 and the account has been open at least 5 years, qualified withdrawals are tax-free.
A $7,500 contribution at age 22 growing at 8% = $170,000+ by age 65.
Same contribution at 35 = $78,000 - a difference that comes almost entirely from the extra years of compounding.
Only about 26% of US households have a Roth IRA.
Annual Limit
$7,500 ($8,600 if 50+) - 2026
Tax Benefit
Tax-free growth and withdrawals in retirement
Requirements
- Earned income equal to or greater than contribution
- Income under $168K single / $252K married for direct contribution (2026). Partial contributions allowed between $153K-$168K single / $242K-$252K married. If income is higher, use Backdoor Roth strategy.
How to Implement
- 1Open a Roth IRA at a brokerage that offers one
- 2Set up automatic monthly contributions
- 3Choose investments within the account (low-cost index and target-date funds are common options)
- 4Contribute up to $7,500/year ($8,600 if 50+) for 2026
Frequently Asked Questions
Understanding IRA Types: Employer vs Individual
Many people don't realize you can contribute to BOTH a workplace retirement plan AND an individual IRA. That's up to $32,000/year in tax-advantaged savings!
| Account Type | Contribution | Through | 2026 Limit | Catch-up |
|---|---|---|---|---|
Employer 401(k) | Pre-tax | Employer | $24,500 | +$8,000 (50+) +$11,250 (60-63) |
Roth 401(k) | After-tax | Employer | $24,500 | +$8,000 (50+) +$11,250 (60-63) |
Traditional IRA | Pre-tax | Individual | $7,500 | +$1,100 (50+) |
Roth IRA | After-tax | Individual | $7,500 | +$1,100 (50+) |
The limits are separate - a 401(k) and an IRA can be funded in the same year
If you have access to a 401(k) at work, you can still contribute to a Traditional or Roth IRA on your own. Combined, that's $32,000 in annual tax-advantaged contributions (before catch-up).
High Earner? You Have Options!
If your income exceeds Roth IRA limits ($168,000 single / $252,000 married):
- Backdoor Roth IRA - Contribute to Traditional IRA, then convert to Roth
- Mega Backdoor Roth - Add up to $47,500+ more via after-tax 401(k)
44%
of US households own IRAs
16%
of households contribute annually
26%
own Roth IRAs specifically
74%
have some tax-advantaged savings
Featured Providers
- Fidelity
- Vanguard
- Schwab
Related retirement strategies
Sources
- Internal Revenue Service, Rev. Proc. 2025-32
2026 inflation-adjusted amounts (tax brackets, standard deduction, estate & gift, FSA, credits)
- Internal Revenue Service, Notice 2025-67
2026 retirement plan limits (401(k), IRA, SIMPLE, catch-up)
- Internal Revenue Service, Rev. Proc. 2025-19
2026 HSA and HDHP inflation-adjusted limits
Educational information only. Not financial, tax, or legal advice or a recommendation. Figures are drawn from the primary sources cited above; verify current amounts with the source before acting.