Retiring a Millionaire With Roth IRAs

Retirement can seem really far away and unimportant, but you could potentially retire a millionaire if you start thinking about it early. With summer or part-time job income that you put into a Roth IRA, you will have accumulated decades of compounded interest by the time you retire.  

As a teenager, you can ask your parents to open a custodial Roth IRA. Investment income won’t count, and the pay has to be legitimate. The minimum initial investment amount depends on the broker, with some having no minimum amount at all. Additionally, note that one of the biggest benefits is that it can grow tax-free. Contributions can be withdrawn at any point, but withdrawing the interest earned from the contributions will incur a 10% early withdrawal penalty if within five years of opening it and before the age of 59½. 

 Your parents can also make contributions to the account to match your earnings and let you spend or save your salary. However, they cannot make any contributions that exceed your income and they cannot make contributions if you don’t have any income. When you reach adulthood, the control of the Roth IRA is transferred to you. The contribution limit for 2022 is $6000 for those under 50, and the more you contribute each year, the better. IRAs are accounts for which you choose the investments, allowing your money to compound over the years. The higher the rate of return, the more money you will retire with.