How Much Should a Roth IRA Be to Be a Millionaire?

One can become a tax-free Roth IRA millionaire if they put away consistent dollars over time and use a simple plan and diversified portfolio, aiming for $1 Million by age 66. A 25 year-old contributing the maximum to their Roth IRA can hit this mark in as few as 9 years!

Maxing Out Your Contributions

Your contribution limit for a Roth IRA depends on your income; however, with consistent maximum contributions it is possible to build up one million dollars by age 65 due to compound interest returns.

Building up an investment account takes time, but don’t let short-term market volatility discourage you. Instead, focus on taking full advantage of your contribution limits by building out a diversified yet cost-efficient portfolio.

If you don’t have access to a company-sponsored retirement plan, other tax-deferred accounts such as traditional IRAs or 401(ks can help you save for retirement. Unfortunately, these types of accounts usually have lower contribution limits; for instance a single filer cannot make full contributions in excess of $138,000 when filing alone and $228k when filing jointly; furthermore withdrawals from non-Roth IRAs will be taxed at earned income rates rather than capital gains rates when withdrawing money withdrawn.

Earned Income

Consistent investing can lead to amassing $1 million in a Roth IRA over time, depending on how much income is generated from earned sources such as salary, hourly wages, bonuses, tips, self-employment income and commissions. Only earned income counts towards Roth IRA contributions.

If your employer offers a 401(k), contribution limits will likely be higher. Even without such a plan, though, Roth IRA contributions remain available as another way of contributing towards retirement savings.

2022 contributions can reach $6,500 or $7,500 if you are 50 or over and can include an extra $1,000 “catch-up” contribution if 60 or over. High income earners cannot contribute to a Roth IRA once their modified adjusted gross income (MAGI) hits $153,000 for singles and $228,000 for couples respectively – although traditional IRA contributions remain available – however choosing a Roth IRA may prove more tax efficient when withdrawing withdrawals are tax free in retirement.

Dividend Reinvestment

Compound interest can be such a powerful force that even with modest investments a young person can accumulate a million-dollar nest egg by the time they retire.

Investment in a Roth IRA allows individuals to take advantage of tax-free growth. This can be especially advantageous in cases when withdrawals before age 59 1/2 may result in income taxes or penalties being assessed against them.

Investors may benefit from reinvesting dividends to further boost the value of their investments; it should be remembered, though, that reinvested dividends are not subject to taxes as cash earnings would be.

As of 2022, the contribution limit to a Roth IRA has increased to $6,000 or $6,500 if over 50. Your adjusted gross income (AGI) determines how much of an AGI-related contribution limit you can make each year; our retirement calculator can help determine how much is necessary to reach your goals or you may speak with one of Wilmington Advisors @ M&T advisors who can create and implement an holistic plan encompassing both short- and long-term objectives.


Saving and investing strategically can enable you to become a millionaire within 38 years by contributing the maximum to an IRA account. But this isn’t your only option for retirement success – employer-sponsored accounts such as 401(k) plans with company matching may also help get you there faster!

Roth accounts are tax-free accounts that enable investors to accumulate investment earnings tax-free; you only pay taxes on contributions you made.

Roth IRAs offer their greatest advantage during later years. Because withdrawals from your Roth won’t incur tax payments when used to benefit your heirs, Roths provide an ideal way for them to keep as much of what was saved intact. Your heirs may also take advantage of traditional IRA’s tax advantages by withdrawing contributions and investment earnings without incurring income taxes or an early withdrawal penalty (although you must be at least 59 1/2 to take this step).

Raymond Banks Administrator
Raymond Banks is a published author in the commodity world. He has written extensively about gold and silver investments, and his work has been featured in some of the most respected financial journals in the industry. Raymond\\\'s expertise in the commodities market is highly sought-after, and he regularly delivers presentations on behalf of various investment firms. He is also a regular guest on financial news programmes, where he offers his expert insights into the latest commodity trends.

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