Roth IRA.

In plain English

A Roth IRA is a personal retirement account you open yourself (not through your employer). You put in money you've already paid taxes on, and in return, every dollar of growth and every withdrawal in retirement comes out tax-free. In 2026, you can contribute up to $7,500 per year ($8,600 if you're 50 or older, including a $1,100 catch-up), as long as your income is below IRS limits.

01Why it matters

IRA stands for Individual Retirement Account. The two main flavors are Roth and Traditional. For many people in their 20s and 30s, the Roth is one of the more useful retirement accounts available. You're typically in a lower tax bracket now than you'll be later, so paying tax on the seed (your contribution) instead of the harvest (decades of growth) is often the better deal.

02The math, step by step

Say you put $7,500 into a Roth IRA at age 30, in a basic index fund. You don't add another dollar. At a 7% average return over 35 years, that single contribution becomes about $80,100 at age 65, and you owe zero tax on it when you withdraw. In a regular brokerage account, you'd owe tax on the gains.

03What this is NOT

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