Roth IRA: How To Be A Tax Free Millionaire With $17/Day!

Roth IRA: How To Be A Tax Free Millionaire With $17/Day!

You can become a millionaire someday by investing $17 per day in a Roth IRA! I explain who a Roth IRA is good for, how to figure out your MAGI, and what compounding rates are needed to reach one million dollars!

If you’re interested in learning about how to win at retirement investment accounts, check out my free detailed PDF guide.

If IRAs are new to you, and you’d like to understand the high level differences between a Roth and Traditional IRA, check out my video on this.

While a Roth IRA may not always be the direct destination for your retirement savings, I think all roads lead to the Roth IRA (Individual Retirement Account)! The main reason is because a traditional IRA, pre-tax 401k, and Roth 401k all have required minimum distributions that happen, but the Roth IRA doesn’t. I explain why in further detail in this video.

A Roth IRA tends to be best for those who are in a lower income tax bracket and are OK with contributing after-tax dollars to a retirement investment account. The main benefit is that any investment gains made on your contributions is no longer taxed or penalized as long as you adhere to the withdrawal rules.

If your modified adjusted gross income (MAGI) is under $125K as a single person or $198K married filing jointly, then you can contribute the max $6K/year if you’re under 50.

It’s also great if you’re over 50 and want to do catch-up contributions to contribute $7K/year to an IRA.

A traditional IRA might be better for those whose income exceeds the Roth MAGI limits, and you don’t have to deal with being phased out of your contribution amounts. And if you’re married, the IRA situation can get a little tricky.

It seems a bit unfair to some married people filing jointly if they’re each earning on average more than $99K/year because that exceeds the total $198K, whereas if each spouse was living separately during the year, they could each be making up to $125K (so really that’s $250K total) filing like a single person and still contributing the max $6K to each of their Roth IRAs.

So an Investopedia article suggests that maybe a Traditional IRA might be one way to go.

I go through the steps on how to figure out your MAGI, and also include an example IRS 1040 Form showing how an AGI can equal the MAGI. For many people, the AGI = MAGI but do check if there are things that need to be added or subtracted to figure out your MAGI to know if you are within the Roth IRA contribution limit or not.

And if you know you make too much to directly qualify for a Roth IRA, you may want to consider doing a backdoor Roth IRA conversion! It does make me wonder why are there even obstacles in place to make people have to do things indirectly?

If you ever need to roll it over from one brokerage trustee to another, I think it’s best to complete their forms and let them handle it than having the check be mailed to you. But this is personal preference.

There’s a promised land of becoming a tax-free millionaire if we invest consistently and get lucky with the stock market if it maintains its historical average rates of returns of 7-10%/year. Depending on what age you start at and the compounding interest rates, you could reach millionaire status by compounding $6,000 of yearly contributions! For calculation purposes, this $6K/year is also the same as $500/month and $16.44/day or just under the $17/day I mentioned in the beginning of this video. There are many compounding calculators online you can use but I reference one from

For example, if we invest $6K every year and it consistently earns 7% of returns, that becomes $1M after 37 years! It gets better at 10% only needing 30 years. Or if we’re so lucky to achieve an impressive 15% of returns, that becomes $1M after only 23 years!

Just keep in mind we need to have had our Roth IRA open for at least 5 years, or if it’s rolled over funds, it needs to be in there for 5 years before you can take it out without penalty or taxes by age 59.5!

All we need is some discipline, patience, and luck and hopefully we’ll reach this tax-free millionaire status someday!

I look forward to making more investor friends! Add me on Instagram: michellemarki! 🙂