PortalKota – The Easiest Way to Become a Millionaire (Roth IRA). Hey welcome back to the channel, I'm Suzanne with Arvabelle and in this video I'm going to show you the easiest method to becoming a tax-free millionaire.
How you can do this is by opening up a Roth IRA. An IRA is an individual retirement account. So a Roth IRA is a type of account.
Opening up the account itself won't do anything for you.
You actually have to invest the money, that's inside of the account, But once you do start investing all of your profits can start growing tax-free.
But how does it grow tax-free? So, with other account types like 401 ( k, ) s, which I talked about in the last video, you contribute pre-tax money. So that's money coming out of your income before you pay taxes on it and you would be able to write off those contributions.
The Easiest Way to Become a Millionaire (Roth IRA)
But a Roth IRA does not work like that With a Roth IRA, you're contributing post tax money, So that's money that you've already paid taxes on Generally.
That means that you'll have a little bit less money to invest upfront, but any profits that you generate. In your Roth IRA, account are tax-free as long as you take them out after you're 59 and a half
In 2019, you can't contribute more than $ 6,000 to your Roth IRA.
That'S the absolute maximum. You also can't contribute more than you earn in a year.
So if you're young and you have a summer job and you only make $ 2,000 for the entire year, you can't contribute more than that.
