In 2026, you can contribute up to $7,000 to a Roth IRA ($8,000 if you're 50+). That money grows tax-free and can be withdrawn tax-free in retirement. It is one of the most powerful wealth-building tools available to Americans — and most people aren't using it.
Why the Roth IRA Is Exceptional
Most retirement accounts defer taxes — you get a deduction now, pay taxes later. The Roth flips this. You contribute after-tax dollars. But the growth and all qualified withdrawals? Completely tax-free.
If you put $7,000/year into a Roth IRA from age 25 to 65 and earn 8% annually, you'd have approximately $1.9 million — none of which is taxed when you withdraw it in retirement.
What to Invest In
The Roth IRA is a wrapper — an account type. Inside it, you choose what to invest in. For most people, the answer is simple:
- Target-Date Fund matching your expected retirement year (e.g., Fidelity Freedom Index 2055) — autopilot option
- Three-Fund Portfolio — Total US Market + International + Bonds
Do not put bonds in a Roth IRA. Bonds are for taxable or traditional accounts where interest is taxed as ordinary income. In the Roth, you want your highest-growth assets.
Fidelity Roth IRA
- No account fees or minimums
- ZERO expense ratio index funds
- Automatic contribution scheduling
- Fractional shares on any investment
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The Backdoor Roth for High Earners
Earn too much for a direct Roth contribution? The backdoor Roth is legal and widely used: contribute to a traditional IRA (non-deductible), then immediately convert to a Roth. No income limit applies to conversions.
Set Up Auto-Contributions
The best way to max out your Roth IRA: automate it. Set up monthly contributions of $583.33 (or $666.67 if you're 50+) starting January 1. Most providers let you link a bank account and set a recurring transfer. Do this once; let it run for decades.