Millennials who don’t contribute to a Roth IRA — or a backdoor Roth IRA — are missing out, said Filip Telibasa, certified financial planner (CFP), owner and planner at Benzina Wealth.

“The big benefit of this account type is tax-free earnings,” he said. “If you start sooner, you will have more time to compound the tax efficiency, putting you way ahead in the long run.”

For 2024, most millennials’ total contribution limit for traditional IRAs and Roth IRAs is $7,000, according to the IRS. However, those who earn above a certain income threshold must use a backdoor Roth IRA, which involves making direct contributions to a traditional IRA, before converting it to a Roth IRA.