When it comes to retirement accounts, the Roth IRA often steals the show and is worth considering. For example, if you rack up a million dollars in a Roth IRA, you can tap into your treasure 100% tax-free if you’ve reached age 59 1/2 and met the requirements of the five-year rule. This perk exists because you paid taxes upfront when you contributed.

While the Roth IRA offers great benefits, it also has limitations. High earners can’t make direct contributions, but strategies like the backdoor Roth IRA can give you access.

But the big question you’re probably wondering is: How do you even work toward a million-dollar Roth IRA? I’ve jotted down three tips to help you crush your Roth IRA goals.

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1. Get in the habit of setting smart goals

Setting goals is a smart way to fill in the gaps in your life, including with a Roth IRA. If you want to hit seven figures, you’ll want to start with setting annual, monthly, and even weekly goals.

Let’s say you want to contribute the maximum amount to a Roth IRA, which is $7,000 in 2024 and 2025 if you’re under 50. All told, contributing that much to a Roth IRA in a year might feel overwhelming. But like any big goal, it helps to break it down into bite-sized pieces to make it more achievable.

Here are a few strategies to help you set smart goals and crush them:

• Slice and dice your goals: Divide $7,000 by the months you have left until the deadline. For example, if you start in January, you’ll need to save about $583 per month to reach your goal by the end of the year. But if you start later, you’ll need to contribute more money every month or even each week. Keep in mind that you have until April 15, 2025 to contribute to a prior-year Roth IRA.
• Automate your success: Set up automatic contributions to your Roth IRA from your checking or savings account. This set-it-and-forget-it method helps you achieve your goals without intervening every month. Just make sure the account funding your Roth IRA is always well-stocked to avoid overdraft issues.
• Manage your dollars: You can beef up your income with freelance work or side gigs. On the flip side, you can cut back on unnecessary expenses, like dining out. Just make sure your income doesn’t jump over the annual threshold to make direct contributions to a Roth IRA.

2. Tap into the power of compounding

One mistake that can throw a wrench in your millionaire goals is not investing your contributions. Even if you max out your contributions every year, reaching your goal in a decent time frame will be impossible without growth.

If you’re funneling money into a Roth IRA, be sure to explore your investment options. These could include a broad-based index fund, like the S&P 500, or blue chip stocks, such as Apple and Microsoft. Historically, the stock market has delivered an average return of around 10%, though future performance isn’t guaranteed.

The power of compounding allows your money to grow faster. Any interest or dividends you earn generate additional earnings when reinvested. Since Roth IRAs have no required minimum distributions, your investments will continue to work for you uninterrupted. Here’s what could happen if you invest $7,000 annually and earn returns of 8%, 10%, or 12%.

3. Keep going

Investing can offer great rewards but can also be a bit bumpy at times. Many superstar stocks, such as the “Magnificent Seven,” took some dips before soaring to the top.

It’s important to maintain a long-term perspective and avoid letting emotions take over. While this is easier said than done, creating a diverse portfolio and staying focused on opportunities can help you persevere. Also, make sure your portfolio aligns with your risk tolerance so you won’t be caught off guard if the market gets wobbly.

Building a million-dollar Roth IRA won’t happen overnight and might not even happen in 10 or 20 years. But if you stay the course and keep growing, you’ll have a better shot at living the retirement you’ve always dreamed of.

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Charlene Rhinehart has positions in Apple and Microsoft. The Motley Fool has positions in and recommends Apple and Microsoft. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.