Sun Sep 29 2024, by Tyler Gardner
The Top Reason You're Losing Thousands by Not Investing in a Roth IRA
Here is the number one reason you are losing hundreds of thousands of dollars by not investing in a Roth IRA. I'm Tyler, a former financial advisor and portfolio manager, and now I create financial content for free to help you save money.
Investing in the Roth IRA
Let's say you put $500 today in a Roth IRA, followed by $500 a month for the next 30 years, investing in a low-cost index fund. With an anticipated 7% return, you will most likely have $570,570 waiting for you in 30 years.
Common Misconceptions
Number two, this is where most of you might think, "It's not that special; you already paid taxes on that money back when you put it in." But here is where most people are mistaken.
The Tax Benefits
You paid taxes on $180,500 of contribution, and because you were savvy enough to invest in a Roth IRA, you not only increased your net worth by $390,000 by doing essentially nothing, but that money—$390,070 of created wealth—is 100% tax-free after age 59 1/2. You have never paid taxes on it, and you never will.
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