Benzinga and Yahoo Finance LLC may earn commission or revenue on some items through the links below. Should young people focus on building retirement savings or on increasing their earning power while they're still young? That question was at the center of a debate after entrepreneur and athletic-wear brand Haus co-founder Lukas Pakter argued that Roth IRAs are the wrong priority for ambitious young adults.
In the TikTok clip, he said that "Roth IRAs are for poor people," adding that they're better suited for individuals seeking a traditional, long-term retirement strategy. His argument wasn't that Roth IRAs don't work. Instead, he said that ambitious young people should focus on increasing their income today instead of setting aside money they won't touch until retirement.
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"I don't want $1.2 million tax-free when I'm 65," Pakter said in the video. "I want money now." He described Roth IRAs as a vehicle designed for people who want a safe, low-effort way to invest, and according to him, young adults can generate much larger returns by investing in education, skills, business opportunities, and personal development. "What the f*** is the point of getting $1.2 million tax-free when you're about to die?" he asked.
"By the time you're 65, according to the average lifespan in the U.S., you have about 12 or 13 years to spend that." Pakter added that someone earning $40,000 a year might be better off spending money on learning new skills or building a business instead of contributing thousands of dollars to a retirement account. He also questioned whether accumulating wealth late in life is as valuable as increasing income and financial freedom while young. "If you want to make money while you're young, you need to invest in your education and becoming better," he said.
"Yes, you have to put in a little bit of work, but it's not supposed to be easy to make money when you're young." Trending: Earn While You Scroll: The Deloitte-Ranked #1 Software Company Growing 32,481% Is Opening Its $0.52/Share Round to Investors Primerica (NYSE:PRI) Senior Regional Leader Anthony Georgescu responded with a video of his own. He argued that Pakter's advice may not reflect the reality facing most Americans. "For 90% of people making under $300,000 a year in the U.S.," Georgescu said, retirement savings still matter.
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