Building a million-dollar retirement might not be easy, but more and more people are crossing the million-dollar mark every year, proving that its possible. In fact, Fidelity noted that as of the end of 2023, a record number of people — 391,562 — had balances of a million or more in their IRAs. This is impressive given that the traditional and Roth IRA contribution limits are lower than those of other retirement accounts, yet people have still managed to use IRAs to achieve their goals.
If youre looking for the blueprint for Roth IRA success, weve put together a few secrets for you to check out.
Have you ever wondered how many people have managed to accumulate a million dollars or more in their Roth IRA accounts? I was curious about this too, so I did some digging. The results are pretty eye-opening and might just inspire you to rethink your retirement strategy!
The Rise of the Roth IRA Millionaire Club
As of the end of 2024, the most recent data shows that there will be about 280,300 Roth IRA millionaires in the United States. The amount of money in this account is amazing when you think about how limited the contributions are and how Roth IRAs have only been around since 1998.
What’s even more interesting is that this number has been steadily growing over the years. In fact, the data shows there are more Roth IRA millionaires than traditional IRA millionaires, despite traditional IRAs having been around much longer!
Breaking Down the Numbers
Let’s take a closer look at the millionaire retirement landscape:
| Account Type | Number of Millionaires |
|---|---|
| Roth IRAs | 280,300 |
| Traditional IRAs | 376,000 |
| 401(k) accounts | 442,000 |
When we look at ultra-high value accounts, the numbers get even more exclusive:
- Nearly 28,600 Americans own IRAs valued at over $5 million
- Of these “mega IRAs,” only about 3,000 are Roth accounts
- The number of people with Roth IRAs worth $5 million or more has tripled since 2011
The Most Famous Roth IRA Millionaires
Some individuals have taken the Roth IRA strategy to extraordinary levels:
Peter Thiel: The Roth IRA Billionaire
The most famous (or infamous, depending on your perspective) Roth IRA success story belongs to PayPal co-founder Peter Thiel. In 1999, he made a modest $1,700 contribution to his Roth IRA and used it to purchase 1.7 million shares of PayPal at just a penny each.
When eBay acquired PayPal in 2002 for $1.5 billion, Thiel’s Roth IRA jumped to $28.5 million. By investing this money in other successful startups like Palantir and Meta Platforms, his Roth IRA reportedly reached a mind-boggling $5 billion by 2019, making it the largest known IRA in history.
Ted Weschler: The Public Market Roth Millionaire
Unlike Thiel, who invested in private companies, Ted Weschler (who now works for Warren Buffett at Berkshire Hathaway) built his Roth IRA wealth through publicly traded securities – something any investor could theoretically access.
Weschler started putting money into his IRA in 1984 and always put the maximum amount allowed in. He changed his account to a Roth IRA and paid $28 million in federal taxes in the process. By 2012, his account had grown to $131 million. By 2018, his Roth IRA had reached $264 million!.
How Do People Become Roth IRA Millionaires?
You may be wondering how these huge account balances are even possible, since there are strict limits on how much you can put in. Here are the three main strategies Roth millionaires have employed:
1. Conversions from Traditional Retirement Accounts
Most Roth millionaires didn’t build their wealth solely through direct contributions. Instead they likely converted substantial traditional IRAs or 401(k) accounts into Roth accounts, paying the tax bill upfront to enjoy tax-free withdrawals later.
Since Roth IRAs were created in 1998, the maximum someone under 50 could have contributed directly is only about $125,000, and for those over 50 taking advantage of catch-up contributions, the ceiling would be around $145,500. Even with excellent market performance, that’s not enough to reach $1 million through contributions alone.
2. Exceptional Investment Performance
Some Roth millionaires achieved their status through outstanding investment returns. While the average annual stock market return is about 10%, some investors have managed to significantly outperform the market by:
- Picking high-growth individual stocks
- Investing in emerging technologies
- Getting in early on successful IPOs
- Taking calculated risks with concentrated positions
3. The “Rich Man’s Roth” Strategy
The “Rich Man’s Roth,” also known as the “Super Roth,” is another popular option. It’s not a real Roth IRA, but a strategy that uses permanent life insurance to create a tax-advantaged environment similar to a Roth IRA.
This strategy uses specialized cash-value life insurance policies (typically Indexed Universal Life or IUL) designed to maximize cash accumulation while minimizing insurance costs. It offers similar tax benefits to a Roth IRA but without the contribution limits, making it attractive to high-income earners.
Can You Become a Roth IRA Millionaire?
The honest answer is: yes, but it’s not easy or quick. Here’s what you need to know:
Time is Your Most Powerful Asset
Building significant wealth in a Roth IRA takes time – typically decades. Ted Weschler had his retirement account for nearly 40 years before it reached its impressive value.
Even if you’re investing efficiently, don’t expect overnight results. The real magic happens when compound growth has enough time to work its power. As one financial advisor put it: “Roth IRA millionaires aren’t created overnight.”
The Math Behind Roth Millionaire Status
Let’s say you contribute the maximum amount ($7,000 for 2025, assuming you’re over 50) every year for 40 years. Your total contribution would be $280,000. If you achieve an average annual return of 8.7% (a typical 60/40 portfolio return according to Vanguard), your Roth IRA could be worth up to $1.5 million by age 67.
So it’s definitely possible, but requires consistent contributions and solid investment performance over a long timeframe.
Why a Roth IRA Millionaire is More Valuable Than Other Millionaires
Here’s something interesting: a million dollars in a Roth IRA is worth more than a million dollars in a traditional retirement account. Why? Because every dollar in your Roth IRA is truly yours – no taxes due on qualified withdrawals!
Consider this comparison:
- $1 million in a traditional 401(k): After paying taxes (let’s say 22% federal), you’d have $780,000
- $1 million in a Roth IRA: You keep the full $1 million
Plus, Roth IRAs offer additional advantages:
- No required minimum distributions (RMDs) during your lifetime
- Tax-free withdrawals for your heirs
- No penalties for accessing contributions before age 59½
- Protection from future tax rate increases
The Wealth Gap in Retirement Savings
The existence of Roth IRA millionaires highlights an important issue: the significant wealth gap in retirement savings in America. According to research:
- Only 24.6% of U.S. households (about 32.3 million) contributed to a Roth IRA in 2022
- Just 3.2% of retirees have over $1 million in retirement accounts
- A mere 0.1% have $5 million or more
This disparity underscores the importance of financial education and early retirement planning.
Should You Aim to Become a Roth IRA Millionaire?
While reaching millionaire status in your Roth IRA is an admirable goal, it shouldn’t be your only focus. Here’s what to consider:
Pros of Maximizing Your Roth IRA
- Tax-free growth and withdrawals: Perhaps the biggest advantage
- No RMDs: Unlike traditional retirement accounts
- Estate planning benefits: Tax-free inheritance for your beneficiaries
- Protection against future tax increases: Your tax rate is locked in when you contribute
Alternative Strategies to Consider
If you’re a high-income earner who can’t contribute directly to a Roth IRA due to income limitations (which in 2025 are $153,000 for single filers and $228,000 for married filing jointly), consider these alternatives:
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Backdoor Roth IRA: Make non-deductible contributions to a Traditional IRA, then convert to a Roth IRA
-
Roth 401(k): If your employer offers this option, you can make after-tax contributions with no income limits
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Rich Man’s Roth Strategy: Using permanent life insurance policies to create tax-free retirement income without contribution limits
My Takeaway on Roth IRA Millionaires
After researching this topic, I’ve come to a few conclusions:
-
Becoming a Roth IRA millionaire is definitely possible, but requires time, consistency, and either excellent investment performance or strategic conversions from other retirement accounts.
-
For most people, the path to retirement security should involve diversification across different account types – not just focusing on one vehicle.
-
The tax-free nature of Roth accounts makes them an extremely valuable part of any comprehensive retirement strategy, even if you never reach the million-dollar mark.
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Start early! The power of compound growth over decades cannot be overstated.
The fact that hundreds of thousands of Americans have already achieved Roth millionaire status should serve as inspiration. With disciplined saving and smart investing, you might just join this exclusive club someday!
Have you started your journey toward Roth IRA wealth? What strategies are you using to maximize your retirement savings? I’d love to hear your thoughts and experiences!
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How many Roth IRAs can you have?
FAQ
How many people have $1 million in their IRA?
Only 3.2% of retirees have $1 million in retirement accounts vs. about 2.6% of Americans in general.
Do millionaires have Roth IRA?
An elite group of investors has taken masterful advantage of these differences — along with the tax rules regarding them — to become Roth IRA millionaires. Also not Roth 401(k) plans at work, where higher contribution limits make it much more likely to reach the seven-figure mark.
What is the average balance in a Roth IRA?
The average Roth IRA balance changes a lot depending on age and other factors, but it usually goes up as you get older and make more money. For example, in 2025, Charles Schwab reported average Roth IRA balances of $11,000 for people in their 20s and $112,000 for those in their 60s, according to a recent study. However, the median balances are often lower, with only $3,000 for those in their 20s and $63,000 for those in their 60s. The actual balance you have is less important than your ability to consistently contribute to your account.
How many people have $500,000 in their retirement account?
How many Americans have $500,000 in retirement savings? Of the 54. 3% of U. S. households that have any money in retirement accounts, only about 9. 3% have $500,000 or more in retirement savings.
How many millionaires have a Roth IRA?
As of the end of 2024, there are approximately 350,000 Roth IRA millionaires in the United States. This represents individuals whose Roth IRA balances have reached or exceeded $1 million through contributions and investment growth over time. Can millionaires have a Roth IRA?.
Is a Roth IRA millionaire worth more than a 401(k)?
But there is a clear winner when it comes to net after-tax income: the Roth IRA millionaire. Only the Roth IRA allows for tax-free withdrawals from the account in retirement. When it comes down to it, the $1 million Roth IRA is worth more than the $1 million 401(k).
How do I become a Roth IRA millionaire?
Many times, the biggest hurdle to building life-changing wealth is getting started. You will need to choose a custodian to hold your Roth IRA account. You can also hire a fee-only Certified Financial Planner to help you set one up and get on track to become a Roth IRA millionaire. Sadly, not everyone can contribute to a Roth IRA each year.
How much can you contribute to a Roth IRA?
The government sets the maximum that can be contributed to a Roth IRA each year. For 2023, the Roth IRA contribution limit is just $6,500. The number is $1,000 higher for those age 50 or older. Even with market-beating investment returns, it will take time to become a Roth IRA millionaire. So, getting started sooner rather than later is important.
Is a million dollars in a Roth IRA a big deal?
Amassing a million dollars in a Roth IRA is a big deal because all of it is tax-free after you turn 59 1/2 and meet the requirements of the f ive-year rule. If you’re willing to be consistent and stick to a proven game plan for success, you’ll be one step closer to joining the ranks of Roth IRA millionaires.
Do you need a huge paycheck to become a Roth IRA millionaire?
You don’t need to pull in a massive paycheck to become a Roth IRA millionaire. In fact, if you’re making too much, you won’t be allowed to make direct contributions to a Roth IRA. It’s important to keep an eye on the annual income limits each year to make sure you still qualify — or consider using a Backdoor Roth IRA if you don’t.