In 1999, He Put $1,700 Worth of His Company’s Stock Into a Roth IRA. By 2019, Peter Thiel Had $5 Billion in Retirement Assets That Will Never Be Taxed Again. Here’s the ...

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Peter Thiel bought 1.7 million PayPal shares for about $1,700 inside a Roth IRA in 1999; by the end of 2019 the account held $5 billion, ProPublica found, and none of it will be taxed on the way out. A 58-year-old with $400,000 in a 401(k) can buy the same account at a known price: $66,500 a year at the 12% bracket costs $5,800 and clears the account by 65 for $40,600 in all, against a $41,307 RMD at 75 taxed at 22%…

In January 1999, Peter Thiel bought 1.7 million shares of PayPal, the company he had just helped found, for a tenth of a cent each, about $1,700 in all, and put them inside a Roth IRA. By the end of 2019 that account held $5 billion, according to tax records obtained by ProPublica and published in June 2021. He paid no tax when the PayPal shares were sold to eBay in 2002, because the sale happened inside the Roth, and once he turns 59 1/2 in April 2027 he can withdraw every dollar without owing a penny of income tax.

For many Americans, funding a 401(k) only leads to more retirement questions. Should you roll your 401k into an IRA, and when? What's the tax impact if the rollover check gets made out to the wrong name? When do required withdrawals begin, and how much do you have to take?

Thiel's account reads as the cleanest case for a Roth there is: money that goes in after tax is never taxed again, however large it grows, as long as the owner waits until 59 1/2 and the account is at least five years old. The limit is that nobody can copy the price he paid. Founders' shares at a tenth of a cent are not on offer to a 58-year-old with a 401(k), and the IRS caps a Roth contribution at $7,500 a year in 2026, or $8,600 at 50 and over. At that pace, moving $400,000 into a Roth would take 47 years.

A conversion has no such cap. Any amount can move from a traditional 401(k) or IRA into a Roth in a single year, there has been no income limit on conversions since 2010, and the only price is ordinary income tax on the amount moved, at whatever bracket it lands in. So the question for a 58-year-old is about brackets: how much to move, how fast, and what it costs against leaving the money where it is until the IRS starts setting the withdrawals at 75.

Take a single filer born in early 1968, 58 this year, whose job ended in 2026. He has $400,000 in the 401(k) he left behind and $300,000 in a taxable brokerage account that he lives on.

Because he has separated from his employer, he can…

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