Every personal finance resource told me to "open a Roth IRA" but nobody explained what it actually was. I spent two hours reading IRS documents trying to figure it out. Here is the version I wish existed — plain English, no jargon, no condescension.
IRA stands for Individual Retirement Account. It's just a special type of investment account with tax advantages. The "Roth" part means you pay taxes now (on the money you put in) and never again — even when you withdraw it in retirement. Normal retirement accounts flip this: you get a tax break now but pay taxes when you take money out later.
Compound interest is the reason. Money invested at 22 has 43 years to grow before a typical retirement age of 65. $6,000 invested at 22 at a 7% average annual return becomes roughly $100,000 by retirement. The same $6,000 invested at 35 becomes about $45,000. Same money, completely different outcome — because of time.
You can contribute up to $7,000 per year to a Roth IRA in 2026 (or $8,000 if you're 50+). You can only contribute if you have earned income — meaning money from a job, freelance work, or self-employment. The contribution limit phases out if you earn over $146,000 as a single filer. At 22 with an entry-level salary, you almost certainly qualify.
Step 1: Choose a brokerage. Fidelity and Vanguard are the two best options for most people — low fees, good tools, excellent reputation. I use Fidelity. Step 2: Go to their website, click 'Open an Account', choose 'Roth IRA'. Step 3: Connect your bank account and fund it. You can start with as little as $1. Step 4: Choose what to invest in. If you have no idea, choose a Target Date Fund with your retirement year (example: Fidelity Freedom 2065 Fund). It automatically adjusts your investments as you get older.
For most 22-year-olds: a total stock market index fund. At Fidelity, FZROX has a 0% expense ratio — meaning it costs you literally nothing to hold. It tracks the entire U.S. stock market. Set it, forget it, let it compound for 40 years.
Questions about setting up your Roth IRA or building your first investment portfolio? Book a 30-minute strategy call.
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