And while the average IRA contains $57,450 to $225,413, depending on which type, there are select individuals who have tens of thousands more than this amount, quietly compounding vast profits in these tax-advantaged funds. Take Peter Thiel, as one example — former CEO of Paypal, current chairman of Palantir Technologies, and billionaire kingmaker in the tech world.
The executive, who co-founded Palantir a year after eBay bought his former firm for $1.5 billion, has had decades of time at the helm of enormously successful companies to amass (and expand) his nest egg.
Leaked tax records showed just how much he’s been able to take advantage of a Roth IRA — to the tune of a staggering $5 billion. But how is this possible, given the contribution restrictions that the Internal Revenue Service imposes on high earners?
Potential IRA tax workarounds
ProPublica, which exhumed the documents a few years back, reported that Thiel’s IRA was worth under a mere $2,000 in the late 1990s, prior to the big Paypal acquisition that made him a multi-millionaire.
Roth IRAs were first launched around that time, with stringent cutoffs: no one with a salary of more than $110,000 per year, not any couple with a household income amounting to more than $160,000 annually, could open one. In addition, the most that account holders could contribute was $2,000 per year.
(Of course, these guidelines have since changed; as of 2026, annual contribution caps sit at $8,600 for those 50 or older, and $7,500 for those under 50. The Modified Adjusted Gross Income threshold is up to $153,000 per individual per year, or up $242,000 per couple for full contributions.)
Executives such as Thiel, just like anyone else, would have to fit the criteria to be able to open these types of accounts, and would not be able to contribute to them during years that their income surpasses the limits, or contribute more each year than the stated limits.
The very rich also often have very little income on paper, as they hold most of their wealth in illiquid assets, and have the opportunity to borrow against it to generate cash. They also may enjoy certain other benefits that the average person would not have access to.
For one, high-net worth individuals that qualify as accredited investors and perhaps have particular industry knowledge (such as in tech) may be able to nab shares in a new startup before they’re made public, or at least before many know about their potential, and while they’re still extremely cheap. If and when that company makes it big, that stock is now worth a pretty penny more — and money within an IRA can be moved strategically to other interests, so the cycle can repeat.
