Short answerA Roth IRA is a retirement account you open yourself. You put in money you've already paid tax on, and qualified withdrawals in retirement come out tax-free. For 2026 the contribution limit is $7,500 if you're under 50.
It's a container, not an investment
This trips up almost everyone. A Roth IRA is a type of account. Think of it as a box with special tax rules. What you hold inside the box is a separate decision.
Opening the account and putting money in does not invest it. Plenty of people find out years later that their contributions sat in cash the whole time.
The trade: tax now, none later
With a Roth, you contribute money that's already been taxed. In exchange, growth and qualified withdrawals are tax-free. The main route to qualified: you're at least 59 and a half, and the account has been open five years.
A traditional IRA flips it. You may get a tax deduction now, and you pay income tax when you take money out.
The 2026 rules, short version
These are the IRS numbers for 2026.
- Contribution limit: $7,500 across all your IRAs if you're under 50.
- You need earned income, and you can't contribute more than you earned.
- Single filers: the amount you can contribute phases out between $153,000 and $168,000 of modified adjusted gross income.
- Married filing jointly: it phases out between $242,000 and $252,000.
Why people in their 20s look at it
Two reasons. First, a starting salary sits in a low tax bracket, and a Roth locks in that rate on the money you put in. Second, time. Tax-free growth gets decades to work.
Also worth knowing: you can take out the amount you contributed at any time without tax or penalty. Earnings are different. Pulling those early can mean tax and a 10% penalty.
Whether a Roth fits you depends on your income, your taxes and your goals. I can explain how it works. I can't tell you what to put in it.