What is Roth IRA?
A retirement account you fund with after-tax money and withdraw from tax-free
Full Explanation
A Roth IRA (Individual Retirement Account) is funded with money you've already paid taxes on. It grows tax-free, and when you withdraw it in retirement — including every dollar of gains — you owe zero tax. The 2026 contribution limit is $7,000/year ($8,000 if you're 50+), and you need earned income to contribute.
Real-World Example
Start putting in $50/month at 18 instead of waiting until 28. That ten-year head start can leave you with over $100,000 more by retirement, purely from a decade of extra tax-free compounding.
Pro Tip
Any teenager with earned income — even from babysitting or a part-time job — can open a Roth IRA. The earlier you start, the more decades of tax-free growth you lock in.
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