Starting a Roth IRA at 41 Costs You $420,000

Priya will owe $0 in tax on about $565,000 of growth, if her money grows 7% a year and she pays the tax first. Here's the one decision a Roth IRA really is, and the three myths that cost people money. A Roth IRA isn't a stock, a fund, or a product. It's a container with one rule: you pay tax now, and the IRS never asks again. In this video I show the math with Priya (31, $75,000 salary, 22% bracket, $500 a month for 34 years): ⏱ CHAPTERS 0:00 The $565,000 hook 0:25 What a Roth IRA really is (and the 2026 limits) 1:27 The three boxes: brokerage vs traditional vs Roth 2:06 Tax the seed or tax the harvest 3:05 The income limits 3:46 Myth 1: A Roth IRA is an investment 4:37 Myth 2: Your money is locked until 59½ 5:51 Myth 3: A Roth is always better 6:16 The math: Roth vs traditional 8:21 Roth vs a regular brokerage account 9:38 Why starting at 41 instead of 31 costs $420,000 10:22 Three rules that quietly cost people money 11:58 The ten-second decision 13:33 The ending 📌 KEY NUMBERS (2026) • IRA contribution limit: $7,500 ($8,600 if 50+) • Roth income phase-out: $153,000–$168,000 (single), $242,000–$252,000 (married filing jointly) • Priya's 7% return is an assumption, not a forecast. Real returns are lumpy. 📚 SOURCES • IRS: Retirement topics, IRA contribution limits: https://www.irs.gov/retirement-plans/... • IRS: Roth IRAs: https://www.irs.gov/retirement-plans/... • IRS Publication 590-A (contributions): https://www.irs.gov/publications/p590a • IRS Publication 590-B (distributions): https://www.irs.gov/publications/p590b ⚠️ This video is for education, not financial or tax advice. Your situation may differ, so check with a licensed professional. Subscribe to Stickonomics for more videos that show the arithmetic instead of just announcing the answer. #RothIRA #PersonalFinance #Investing