Glossary
Roth IRA
A Roth IRA is a retirement account funded with after-tax dollars, meaning withdrawals in retirement — including all investment growth — are completely tax-free. Contributions (but not earnings) can be withdrawn anytime without penalty.
Why it matters
A Roth IRA is one of the most powerful wealth-building tools available because tax-free growth over decades is extraordinarily valuable. If you contribute $6,500/year from age 25 to 65, you'd contribute $260,000 — but at 7% returns, the account would hold approximately $1.3 million, all withdrawable tax-free. No other account offers this benefit.
Example
The 2024 Roth IRA contribution limit is $7,000 ($8,000 if 50+). Income phase-outs begin at $146,000 for single filers and $230,000 for married filing jointly.
How Ray helps
Ray tracks contributions and growth in your connected Roth IRA. Try to ensure you're on track to max out the annual limit.
$ ray "how much have I contributed to my Roth IRA this year?"Related terms
401(k)
A 401(k) is an employer-sponsored retirement savings plan that lets you contribute pre-tax income (traditional) or after-tax income (Roth 401k), often with an employer match.
Compound Interest
Compound interest is interest earned on both your original principal and on previously accumulated interest.
Tax Bracket
A tax bracket is a range of income taxed at a specific rate in the U.S.
Capital Gains
A capital gain is the profit you earn when you sell an asset for more than you paid.
Time Value of Money
The time value of money (TVM) is the principle that a dollar today is worth more than a dollar in the future, because today's dollar can be invested to earn returns.