The best Roth IRA accounts are easy to open online. There are a ton of online brokerage firms that let you open a Roth IRA and invest in various funds.
To help you with your search for the best Roth IRA account, we compared more than 30 financial companies to find out which ones offer the best Roth IRA accounts in terms of investment options, investment help, and fees involved.
Our top pick is Betterment due to the way it helps beginners build a portfolio while keeping ongoing account management costs low.
Unlike a Traditional IRA, a Roth IRA account lets you make contributions with after-tax dollars. This means you pay income taxes on the money before you move it to your Roth IRA.
While this means you’ll pay taxes now, contributing to a Roth IRA can make a big difference in the future. This is because your money grows tax-free. When you withdraw from your account after age 59 1/2, you can use your Roth IRA funds without paying income taxes and without any penalty.
This all sounds great, but it can be easy to become overwhelmed when you start looking at where to open a Roth IRA. Not only that but how will you invest the money that’s inside your Roth IRA?
The Best Roth IRA Options of 2023
- Beginners; Hands Off
- $0 per trade
- Annual: 0.25-0.40% account balance
- Minimum: $100/mo
- Self-Directed Investors
- $0 per trade
- Annual: $0
- Minimum: $100
- Low Fees
- $0 per trade
- Annual: $0
- Minimum: $0
- Beginners; Hands Off
- $0 per trade
- Annual: 0.15% (advisory fees) + 0.85% (management fees)
- $10 for Starter
- $1,000 for Basic
- $5,000 for Core
- ETF Trading
- $0 per trade
- $49.99 mutual fund
- Annual: $0
- Minimum: $0
- $0 per trade
- $19.99 mutual fund
- Annual: $0
- Minimum: $0
- $8.95 per trade
- $45 mutual fund
- Annual: $0
- Minimum: $50
- Low Cost
- $0 trades for online stock and option trades
- Annual: $0
- Minimum: $1,000
- Low Cost
- $0 Vanguard funds
- Annual: $0
- Minimum: Varies
- Low Cost
- $0 For Fidelity funds
- Annual: $0
- Minimum: $0
Reviews of the Best Roth IRA Companies
Table of Contents
- The Best Roth IRA Options of 2023
- Reviews of the Best Roth IRA Companies
- Betterment – Best Roth IRA for Hands Off Investing
- M1 Finance — Best for Self-Directed Investors
- Stash — Best for Low Fees
- Fundrise – Best Non-Stock Investments
- TD Ameritrade – Best for ETF Trading
- E*TRADE – Solid Option Overall
- USAA – Best Roth IRA for Military and their Families
- Charles Schwab – Low Cost
- Vanguard – Low Cost
- Fidelity – Low Cost
- Which Roth IRA Accounts Didn’t Make the Cut?
- How We Chose the Best Roth IRA Accounts
- What You Need to Know When Opening a Roth IRA
- Summary – Top Roth IRA Accounts
- FAQs on Best Roth IRA Accounts
We chose 10 different Roth IRA providers for our ranking, but it’s possible one of these providers will ultimately suit your needs the best. The following reviews break down the highlights of each of these companies, how much you’ll pay in fees, and who they might be best for.
Betterment – Best Roth IRA for Hands Off Investing
In recent years, Betterment has made a splash in the world of investing. If you are a hands-off investor who wants to grow retirement wealth over time, Betterment might be the right choice for you.
What to know:
- Fees are based on the total amount invested. Betterment offers a no-fee “Checking” plan, a “Digital Investing” plan with a 0.25% annual fee, and a “Premium Investing” plan with a 0.40% annual fee.
- The Checking and Digital Investing plans have no minimum balance requirement; the Premium Investing plan has a $100,000 minimum.
M1 Finance — Best for Self-Directed Investors
M1 Finance is ideal for experienced investors who want to customize their investment accounts. You can invest in fractional shares that help you diversify as much as possible, and automate your investing schedule to stay on track with your goals.
What to know:
- “Pie-based” interface that lets you customize a portfolio based on your appetite for risk.
- You can choose from more than 6,000 stocks and funds to build your own pie, or you can choose from more than 100 pies expertly created by M1 Finance.
- M1 Finance lets investors get started with a Roth IRA and other investment accounts without any fees, and they don’t charge trading fees, either.
- Requires a minimum deposit of $100.
Stash — Best for Low Fees
Stash offers Roth IRAs as well as an array of digital banking products from bank accounts to metal cards that reward you with stock when you shop.
What to know:
- Three account options: Stash Beginner ($1 per month), Stash Growth ($3 per month) and Stash+ ($9 per month).
- You’ll need to upgrade to the mid-tier Stash Growth account at $3 per month to have a Roth IRA with this provider. This type of account also comes with a bank account and free budgeting tools, among other benefits.
- For its Roth IRA offering, Stash lets you invest with no added investment fees. The Roth IRA account minimum starts at just $.01.
Fundrise – Best Non-Stock Investments
Fundrise is the top crowd-funding real estate platform in the United States. Unlike the other brokerage firms in this post, Fundrise allows you to invest in a low cost diversified real estate portfolio that are typically reserved for institutional investors.
What to know:
- Fundrise partners with a third-party custodian, Millennium Trust Company, LLC , to set up a self-directed Roth IRA. This allows you to direct your investments and not be limited to just stocks.
- Custodial fees are $125 annually (this does not include their management fee).
- Fundrise individual retirement accounts do not have an investment minimum. But they offer to waive the $125 annual IRA fee if you do one of the following: 1) invest $3,000 (or more) 2) Maintain an account value greater than $25,000.
TD Ameritrade – Best for ETF Trading
Another brokerage firm that mixes online discount trades with brick-and-mortar locations is TD Ameritrade. This brokerage has more than 175 locations around the country that you can walk into whenever you have a question you want to be answered in person. Their online trading platform is also easy to use.
What to know:
- Trade costs are competitive on the stock and ETF side, with a no-fee commission structure. It’s also worth noting that TD Ameritrade has an extensive collection of commission-free ETFs.
- Mutual fund charge of $49.99 per trade.
E*TRADE – Solid Option Overall
E*TRADE has been around since 1992 and has constantly been pushing the industry to innovate trading technologies for customers.
What to know:
- E*TRADE’s has more than 9,000+ mutual funds available that come with no load and no transaction fee. Adding these to your Roth IRA will lower your fees.
- Technically, E*TRADE has brick-and-mortar locations for you to visit, but there are only 30 in the entire country. E*TRADE is primarily an online discount brokerage firm, and it’s an industry leader in this space.
USAA – Best Roth IRA for Military and their Families
USAA provides a variety of services and accounts for military personnel and their families. If you or one of your family members has ever been a part of any military service, you should be able to open an account with USAA.
What to know:
- Although USAA’s trading fees might be a little higher than other options, it offers just about any insurance or financial product you’ll need.
- USAA lets you bundle all of your accounts and policies with a single company for a potential discount.
- Some fees can be waived by upgrading to a premium account.
Charles Schwab – Low Cost
Charles Schwab is a full-service brokerage that is trying to play in the discount brokerage space.
What to know:
- No fee for online stock and ETF trades, $25 for broker-assisted trades.
- You’ll pay $0 in commission with Charles Schwab for option trades, although you’ll pay $.0.65 per options contract. An additional $25 service fee applies for broker-assisted options trades.
- All other mutual funds are up to $49.95 per purchase. An additional $25 service fee applies for broker-assisted mutual fund trades.
Vanguard – Low Cost
Vanguard is well known for its high-quality funds that have performed better than peer-group averages over the last ten years.
What to know:
- Choose from more than 200 commission-free Vanguard mutual funds and ETFs.
- Competitive trading commissions are also offered on non-Vanguard mutual funds and ETFs, and stocks and bonds.
Fidelity – Low Cost
At this brokerage, a broad range of investment choices are available, and Fidelity offers helpful tools that can help you optimize your investment strategy and grow wealth over time.
What to know:
- No account service fees.
- $0 commissions for online U.S. stock, ETF, and option trades.
- Fidelity also lets you open and account online and get started investing right away. From there, its online platform makes it easy to research investment options and track your progress over time.
Which Roth IRA Accounts Didn’t Make the Cut?
Although the Roth IRA providers listed above are good ones, there are plenty of others that didn’t quite make it on our list. We didn’t include Wealthfront or Personal Capital, for example, because we found that Betterment offers a better platform and a more competitive package among robo-advisors.
We also didn’t include Acorns and plenty of other “techy” or app-based investment options that work in conjunction with consumer spending.
For the most part, we focused on traditional Roth IRA providers for our study, and only the ones that offer the best investment options with the lowest fees possible.
How We Chose the Best Roth IRA Accounts
The best Roth IRA accounts offer a broad selection of investment options with minimal fees. Beyond their investment options, the top Roth IRA accounts are also easy to open online and from the comfort of your home.
Although a lot of thought and research went into our ranking, here are the main factors we looked for in the best Roth IRA accounts this year.
Opening a Roth IRA account can help you save on taxes later in life, but you’ll get the best results if you have a broad selection of investments to choose from. We looked for providers that offer many investment options ranging from index funds to ETFs. The more options available from each provider, the higher they scored in our ranking.
Low Trading Fees
We also looked for Roth IRA accounts with low fees, both in terms of ongoing account management fees and individual trading fees. The Roth IRA accounts on our list tend to come with some of the lowest fees available today. Many also offer a range of fee-free investments to choose from.
Finally, we gave precedence to Roth IRA providers that offer hands-on investing help. Some of the accounts on our list will even choose all your underlying investments for you. Many also offer investor education and online tools that can help you learn how to invest for optimal results.
What You Need to Know When Opening a Roth IRA
Saving money on taxes later in life sounds like a no-brainer, but there are still plenty of things you should know about Roth IRA accounts before you sign up. Because eligibility requirements and contribution limits are determined by the Internal Revenue Service (IRS), you’ll also need to stay on top of these crucial details.
Here’s everything you need to know before you open a Roth IRA with one of the brokerage firms we profiled above.
Make Sure You’re Eligible for a Roth IRA
It’s important to establish that you qualify for a Roth IRA. For starters, you need to have earned income. If you are a stay-at-home partner, your spouse can make contributions to your Roth IRA. It’s also possible for minors to contribute to custodial Roth IRAs if they earn money from a job.
You also need to meet income requirements based on your tax filing status. The IRS evaluates these requirements each year and can make changes based on inflation.
For the 2023 tax season, married couples filing jointly can contribute the full amount to a Roth if their modified adjustable gross income (MAGI) is below $218,000. For incomes between $218,000 and under $228,000, the contribution maximum is lowered and ultimately phased out.
Single filers can contribute the maximum to a Roth IRA if they earn less than $138,000. For incomes between $138,000 and under $153,000, contribution limits are lowered and phased out.
For the 2023 tax season the IRS increased Roth IRA contribution limits. You can contribute up to $6,500 to your Roth IRA each year. If you are age 50 or older, you can make an additional “catch-up” contribution of $1,000 per year for a total annual contribution of $7,500.
It’s also possible to convert a Traditional IRA to a Roth account, or to roll over a 401(k) into a Roth IRA. However, there are tax consequences associated with this decision. You will have to pay taxes on the amount you convert or rollover today, and that can mean a hefty tax bill. Consult with a financial professional before you make this type of conversion.
Building the Roth IRA Habit
Having trouble getting into the habit of sending money into your Roth IRA? You’re not alone. All of the above companies provide some sort of automatic investment option, which can help a lot.
Automatic investing is one of the best ways to build your Roth IRA without having to think about it every month. Simply open an account with a brokerage firm above and set up automatic contributions, and you’re good to go.
Should I Combine My Investment Accounts?
Of course, you may have investment accounts, Roth IRAs, and Traditional IRAs across several different companies. You have multiple logins to remember to check up on your investments, and having some understanding of your asset allocation is not easy. Some investors consider combining their accounts for this reason, but this strategy comes with a lot of paperwork and headache.
Enter Personal Capital. The company aims to solve the problems of managing multiple accounts, tracking your asset allocation, watching the performance of your investments, and helping you keep all of your financial tasks in order.
With a slick web interface and mobile apps that work on iOS and Android, you can see everything together in one well-designed space. On top of that, Personal Capital offers a free analysis to help you reduce what you pay.
The best part about Personal Capital? The software is 100% free. Check it out here.
How to Think About Taxes
With mounting national debt, many people believe personal income tax rates will eventually be forced to increase. So, even if you think that you will have a lower income during retirement, you might still be in a higher tax bracket or have other tax considerations impacting your finances.
Even if the national debt issue is somehow solved, the government doesn’t tend to lower a tax once it is set.
If you think that tax rates are going to go up by the time you retire, the best retirement account for you to open if you qualify for it is the Roth IRA.
A Roth IRA can be especially beneficial to you if you are just starting your first job. Chances are that you won’t make very much. Your tax liability might be fairly low anyway, so paying taxes on your low income isn’t likely to be a huge burden to you today. Plus, you have even more time on your side to let compound interest work its magic on your behalf.
Summary – Top Roth IRA Accounts
The best Roth IRA accounts of 2023 can help you save for retirement while reducing your tax burden later on. Make sure to compare each of the Roth IRA providers on this list in terms of their fees and investment options before you pull the trigger.
There is no reason to put off investing for retirement. Open a Roth IRA today with one of the best brokers. It’s easy, inexpensive, and your future self with thank you.
FAQs on Best Roth IRA Accounts
There are many financial institutions that offer Roth IRA accounts, including banks, credit unions, brokerage firms, and online investment platforms. When choosing the best institution for your Roth IRA, it’s important to consider factors such as fees, investment options, customer service, and the level of support and resources provided to account holders.
Some popular financial institutions that offer Roth IRA accounts include:
Vanguard: Vanguard is a well-known investment firm that offers a range of investment options, including mutual funds, ETFs, and individual stocks and bonds, as well as a variety of IRA options. Vanguard is known for its low fees and strong track record of performance.
Fidelity: Fidelity is another large investment firm that offers a wide range of investment options, including mutual funds, ETFs, and individual stocks and bonds. Fidelity also offers a variety of IRA options, including Roth IRAs.
Charles Schwab: Charles Schwab is a full-service brokerage firm that offers a range of investment options, including mutual funds, ETFs, and individual stocks and bonds. Schwab also offers a variety of IRA options, including Roth IRAs.
E-Trade: E-Trade is an online brokerage firm that offers a range of investment options, including mutual funds, ETFs, and individual stocks and bonds. E-Trade also offers a variety of IRA options, including Roth IRAs.
M1 Finance: M1 Finance is an online investment platform that allows users to invest in a variety of assets, including stocks, ETFs, and mutual funds. M1 Finance offers a range of features and tools to help users manage their investments, including automatic rebalancing, tax-loss harvesting, and customizable investment portfolios.
Ultimately, the best institution for your Roth IRA will depend on your personal financial situation and investment goals. It’s important to do your research and carefully consider your options before making a decision.
It does matter where you open a Roth IRA, as different financial institutions may offer different features, investment options, and fees. Here’s a few things to pay special attention to:
Investment options: Different financial institutions may offer different investment options, such as mutual funds, ETFs, and individual stocks and bonds. It’s important to choose an institution that offers the types of investments you are interested in, as well as a diverse range of options to help diversify your portfolio.
Fees: Many financial institutions charge fees for opening and maintaining a Roth IRA, as well as fees for trading or purchasing certain investments. It’s important to compare fees at different institutions and choose one that offers competitive pricing.
Customer service: If you have questions or need help managing your Roth IRA, it’s important to choose an institution with good customer service and support. Consider factors such as the availability of live support, online resources, and educational materials.
Convenience: Consider factors such as the ease of opening and managing an account, the availability of mobile apps and other tools, and the overall user experience when choosing where to open a Roth IRA.
Overall, it’s important to do your research and carefully compare different financial institutions before choosing where to open a Roth IRA.
It’s not necessarily better to open a Roth IRA with a bank versus other financial institutions, such as brokerage firms or online investment platforms. Instead, it’s important to consider a variety of factors when choosing where to open a Roth IRA, including the investment options offered, fees, customer service, and overall convenience.
Banks may offer a range of investment options, including mutual funds, ETFs, and individual stocks and bonds. However, these options may be more limited than those offered by brokerage firms or online investment platforms, which typically have a wider selection of investment products.
Banks may also charge higher fees for opening and maintaining a Roth IRA, and may have less
comprehensive customer support and resources compared to other types of financial institutions.
That being said, banks may offer other benefits, such as the convenience of being able to manage your Roth IRA alongside your other financial accounts, and the security of working with a well-established and regulated institution. Ultimately, the best institution for your Roth IRA will depend on your personal financial situation and investment goals.
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Cited Research Articles
- IRS.gov IRA Contribution Limits https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-ira-contribution-limits
- IRS.gove Roth IRA Income Limits https://www.irs.gov/retirement-plans/amount-of-roth-ira-contributions-that-you-can-make-for-2023
Want to start a Roth IRA for our adult son, any advise on which
company we should consider.
I am a stay-home mom. I have about about $39K in my current Roth IRA account. I’m considering transferring it to a new financial institution to manage, because my current one has high loads and they are unwilling to disclose fees, commissions and so forth on paper. I don’t trust them to work in my interest. Anyhow, from 2016 to 2017, my returns rate is about 12%. Where should I transfer my Roth IRA to get the same or compatible returns rate with low fees and commission? Thanks.
Hi Phuong – I return of 12% is pretty healthy, so I can’t recommend any place that will guarantee you that return.
Hello, I turned 18 in August this year and I’m still a senior in high school. I haven’t gotten a job yet and will soon be going off to college where I’ll have to start working soon. I do have some money set aside that’s around 1000-2500 (can’t remember exactly). I’m a bit young to be looking into a Roth, but I want to put it and maybe a little more later into one where I can mostly just set it aside and forget about it until it’s time. Any suggestions?
Hi Marcella – Since you’re just starting out, you might try one of the robo advisors, like Betterment or Wealthfront. They’ll pick the investments for you, and then fully manage the account. All you’ll need to do is fund the account. A Roth is good for you at this point, since you can withdraw your contributions without tax consequences.
What about Vanguard? They’re the best! And their commission is $0 to buy the best index funds… VTSAX, etc.
My 29 year old wife did some part time work and earned about $3000 in 2016. I would like to invest her entire gross income into a Roth IRA. I am looking for something where it is set it and forget it and just leave it in stocks for the next 30 years. Suggestions?
@Joe Really, any online brokerage will do. If you’re looking specifically for stocks, take a look at Scottrade or Etrade. If you want ETF’s, Betterment is a great option. For mutual funds, I would look at Vanguard.
I currently have both traditional and Roth IRA accounts at TD Ameritrade. I am currently making monthly investments only into the traditional one because I got the impression that I earn too much money to do this with the Roth per IRS rules. What is the best advice here if you are claiming married with $140K+ income??
If you are married filing jointly with an income of $140k you should be able to make Roth contributions. The IRS income limit for MFJ for 2016 is $184,000 (phased out up to $194,000). The other option is simply to do a backdoor Roth by converting your IRA balance to a Roth.
I am really frustrated because I have had $55 in Betterment since April of 2015 and have not had any positive returns since then. I am currently at a ($3600.00) loss and my rate of return is -4.3. I am 60 years old and can’t afford to be losing money with them and want a place where I will at least earn what I have lost. I can’t afford to lose my hard earned money. Someone had told me back then that Betterment was the place to put it well I DISAGREE.
Hi Michellene – Unfortunately the stock market has been very volatile since May of 2015, so that helps to explain your losses. It’s likely that you would have lost money anywhere you invested during that time. I don’t know how and when you will be able to recover the money you lost. But the potential for losing money is a part of investing in the stock market. If you’re not comfortable with that, you might want to consider getting into fixed income investments. They don’t pay much in interest, but you won’t lose any money on them either.
Passive investing is not for short-sighted folks.
I need some advice. I want to start a Roth IRA in addition to my company’s 401k. Can you recommend 3 companies that would be best for Roth IRA in your opinion? Also what should the majority of funds be in this Roth? Thank you.
@ John My top two recommendations for opening a Roth IRA are Scottrade and Betterment. Scottrade if you want more control of your investments. Betterment if you want them to choose the investments for you (they use ETF’s for their portfolios).
Scottrade IRA Department is an incompetent bunch of clowns. I tried twice to partially transfer part of my wife’s IRA to a Roth. The first time the IRA department transferred all the assets into the Roth creating a huge tax liability. The second time they transferred all the assets out of the Roth back into the IRA. I am attempting a third try to get it right. It may or may not happen
Hi Ronald – It sounds like it may be time to go in for a face-to-face meeting to get this straightened out. I’d recommend going to another brokerage, but you have to fix what’s broken with this transaction so that it won’t have negative tax implications. Your best strategy is to work with them to fix it, then to move the money to another brokerage once it is.
That’s curious Ronald, Scottrade normally has good customer service. I don’t doubt what you’re saying though. Every now and again, everyone messes up. You should make a personal visit and see if you can’t get this all straightened out. I’d call in advance, make an appointment and bring any and all paperwork.
I have decided I am finally going to setup a Roth IRA. I was initially just going to go with Vangaurd until I did a little more research and discovered there are several companies which will setup a Roth IRA for you and they all have different fees and what not.
My plan is to open with $1,000 and deposit $50-$100 a month into the account and just sit back with my fingers crossed that it grows.
My question for you is, do the fees for Commissions on Stocks, ETFs, and Mutual Funds apply to me? Is that only for people who actively use their account to buy/sell stocks?
I thought I just gave “them” my money, picked a particular fund to put it in, and then let the market determine my future.
Hi Jeff! Thanks a lot for this great post!
I have a 401k at my old employer that I want to roll over to a Roth IRA.
I’ve been thinking about using the free advice from platforms such as futureadvisor or sigfig to manage the account myself. Now the question is, where should I start my Roth IRA? I am considering a Vanguard Roth IRA because futureadvisor suggests switching to some Vanguard ETFs which would be free with a Vanguard account and the fees to buy the other ETFs for example from Schwab seem to be not that high either. Why would I use Scottrade or E*Trade in my case? And if I’m thinking about using betterment and the likes in the future, would it be better to open a Roth IRA at TD Ameritrade or Fidelity right away since that’s what they would roll it over to when they start managing my accounts anyway?
Thank you so much in advance! I hope my questions are clear.
Schwab @ $76? That must be a typo, because I’ve never had anything above $10.
Hi! I was hoping you could help. I have a Roth IRA account from a pervious employer with very little money in it. Which company do you think would be best to open an account with less than $500 in it?
@ Hallie Check out Scottrade or Betterment. With Scottrade, the $500 amount won’t be an issue to open the account but you might run into issues with mutual funds having minimums. They range from $250 to $2,500. With Betterment, you won’t have any issues at all.
I am planing to move my emergency fund(15K) from my Chase savings account to new Roth IRA account. I am hoping to put the money in a money market account.
I am struggling to find the best roth IRA account because there are so many of them. Do you have any recommendations for me? My goal is to find low cost money market account in a reputable company.
@ thushara If you’re looking purely for money market account (not sure why that would be your focus with a Roth IRA) find one that doesn’t charge an annual fee. Scottrade, Etrade and a host of others should work.
Thanks for the reply. Do you have any other recommendations to keep my emergency fund.
I am sick of current return and need some other place with some interest at least to keep up with inflation.
The problem with investing your Emergency Fund is that you lose accessibility. Your emergency fund isn’t an investment, it’s insurance. Insurance doesn’t make you money, it costs money. You are going to, unfortunately, have to accept that your emergency fund is going to lose money in inflation.
Just like car insurance protects you against the loss of your car, an emergency fund protects you against a loss of income or other major financial emergency. Therefore, that money needs to be liquid, which means a savings account (at ~.5% interest) or a money market account (at ~1% interest).
Don’t consider it an investment, consider it insurance, pay the cost, and use your Roth IRA, 401k, or other investments as your long-term return.
Excellent advice PJ!!!
Hi, Jeff. Great article. One question that it does not address is the security of the money invested in a IRA account. I have opened a Roth IRA with Vanguard, I am thinking, are my money secure? When I am talking about security, I refer to misappropriation of assets by the firm (not talking about market/investment risk). Or are the investments insured if the firm misappropriates assets? It is not that this is likely to happen, but we have seen firms bringing investors down.
If investor assets are not protected, would you recommend splitting the IRA investment into 2 separate accounts in different firms (respectively in different ETFs/MF)?
@ Joe Most of these firms (including Vanguard) should have SIPC insurance. You can read more about what that exactly protects here.
Hi Joe – Most firms, certainly Vanguard, participate in SIPC (Security Investors Protections Corporation) which functions much like the FDIC does with banks. It insures your assets up to $900,000 total, including $500,000 in cash. Some firms also purchase additional private source insurance too. The coverage protects you against broker failure, including misappropriation. So don’t worry, you’re about as covered as you can be!
Hi Jeff, My 17 year old earned over $500 this summer working at a camp for children (2 weeks). I have encouraged her to start a Roth with the income. The question is this:. The camp paid her a check each week, but did not take out taxes (they said she did not make enough to require that step). How might this income be reported on Form1040A and thus be eligible for placement in a Roth IRA? Any insights?
We have our Roth with Northwest Mutual, and I honestly have no idea about their fees and such. I’m going to find out now, but what makes it worth switching?
Here’s a start: ask how much you’re paying and what the NET return has been. If they can’t answer those simple questions then it’s time to switch.
After reading many of your posts, I’ve decided to give investment a try for my own sake, better late than never.
I have a checking account with Capital One so I’m planning on going with Sharebuilder! Wish me luck! Thank a lot for ALL the info you share with us, beginners!
Hi Jeff. I have 200000 in cash that I would like to invest but I have no clue what to invest in. I’m retiring on the next 5-10 years. What can I do to try to keep up with inflation? I hear annual annuities give 6% interest while maintaining the same amount you put in. Is this a good place to keep it? What do you recommend? Thanks!
@ Nancy Annuities can be a good option for you, but it truly depends on several factors. Here’s an article that I wrote that answers the questions if annuities are really good investments. Also, happy to offer a free chat to go over your situation and present a few options for you to consider.
I’m 65, wife is 68. We have some extra cash we’ve saved & are considering a Roth. Are there any options for us regarding the 5 years to begin distributions?
Very detailed list of online brokers and a good resource for any investor looking to make a financial switch. I’ve used share builder and vanguard and cant complain with their services. I will spread the word on this post, good job.
Jeff great article but I have a few questions. I’m in a bit of a situation. I left my old company and I have a 401k and pension there. I realize the market is going to crash probably sometime this year maybe a few months from now. I’m new to investing so excuse my ignorance. With my pension and 401k I have the option to roll them into a IRA. I have got so much information I’m starting to over think the options. My current 401k investments are US Equity (S&P 500), Small Cap, Emerging Market and International and I have not changed those for 10 years. I want to reduce any fees I have to pay and after reading your article it seems to me my best option is to go straight to one of the 3 Mutual fund companies you mentioned direct and open my own account. My local credit union told me their one time up front fee is about 4% if i select to go into a mutual fund. Again excuse my ignorance but I’m just learning about Mutual funds and ETFs since I’m a full time Engineer and not a financial guru. I was told by the financial rep at my credit union I have an option to put my money into a Money Market account which is getting very low returns and since it is not invested into the mutual fund i won’t lose anything once the market crash back down to real world expectations than i can put that money into the market and get in low. That is the plan i suggested and agreed, but If i were to do this all on my own so I don’t have to pay any bank fees what is my option? Can i got to Fidelity and open a traditional IRA put my money into some Money market account? Than move it over? or should i still keep in my old employers 401k plan or roll it over into my new employers 401k plan. I have another 30 years before I want to retire. Any help is appreciated.
@A.F. You can open an account with Fidelity and put it in a money market account, for sure. Be careful though, I’ve seen many people sit in cash for too long and miss the rally for the past 5 years. Have you checked out AssetLock, yet? Might be what the Dr. ordered. 😉
I am a beneficiary of a few Ira’s from my daughters investments. I know she had both regular Ira’s and Roth as well. Is there a difference to my tax consequences when I cash them in? Please help. I am in my late seventies and not up on this stuff. Thanks for any help you can give.
I stumbled upon one of your YouTube videos earlier for the first time ever. I only just turned 18 in December but I’m very eager to start my own Roth IRA, most likely with Sharebuilder since my bank account is with Capital One. I’m kind of confused though- would I be smarter to just deposit a small amount of money into my IRA monthly, say $50, or to invest in different stocks and mutual funds? I’m not quite sure about all of that, for I am new to all of this. Thanks so much for your time and may God bless you.
@ Alex I absolutely love the idea of staring off small such as $50/mo. Many people don’t think that a small amount can make much of an impact, but it can! Get comfortable investing a small amount and test the waters with different investments. As you become more comfortable with your investment selection, then you can eventually add more money. Follow this strategy and you’re on the path to becoming a millionaire! 🙂
How easy is it to transfer a Traditional Ira to one where you would pay less fees, if it has recently been moved from a TSP to the current place it’s at now?
I’m still not sure how Roth IRA works. My company does not match on the 401K it offers. Can I contribute or deposit money directly to Roth IRA instead of contributing to 401K? If I contribute every month to a Roth IRA, are the contributions going to be taxed?
I am 50 yrs old is this still advisable for me?
Great post! Thanks for the insights to help new investors like me.
Hello Jeff can you tell me how to go about moving a roth ira to another company I am sick of the fees from wells fargo thanks
@ Jeff All you have to do is open a Roth IRA account at the new firm. Once the account is open you then will complete their transfer paperwork (they’ll usually need a complete statement from your existing Roth IRA). That’s it.
Be aware that your old custodian (Wells Fargo) will most likely charge you a transfer out fee. This could be anywhere from $50-$115.
Jeff, I was wondering if you have a joint Roth IRA with your wife or do you and your wife have separate accounts? One of my main goals is to have a Roth IRA despite not having too much knowledge on how to get started and the best place to invest however now that I’m married, I’m unsure if it’s even possible to have a joint Roth IRA?
@vanessa You can not have a joint Roth IRA. What you do is list your spouse as the primary beneficiary so if something happens to you it goes directly to them. It’s basically the same as having a joint Roth IRA.
Does it mean, me and my husband can both open Roth IRA and use each other as beneficiary? Thanks!^^
I looked at the promotion for Scottrade and Sharebuilder–the fine print states that the offers do not apply to IRAs.
We almost did the same thing. We suffered a hardship as well but decided to borrow against our 401-k (Invesco). Our interest rate was low and so were the payments. Keep in mind one of us was still employed so everyone’s situation is different.
Don’t forget about Ariel Investments. I have a Roth account with them in addition to a TSP account working for the Department of Defense. They have decent returns and no fees unless I withdraw early
I checked out Ariel investments but the expense ratios are way to high. Vanguard has a fund comparison tool on their website. You should think about comparing your fund(s) at Ariel to the funds Vanguard offer. The TSP is always a great deal though… just remember to allocate your funds somewhere other than the G-fund. A lot of troops make the mistake of just setting it up and then not allocating their funds.
401-Ks are great if the economy is good and you’re gainfully employed. God help you if you need to draw funds before you hit 59 ½. My husband lost his job a while back and my hours were drastically cut at my job. We had no choice but to take out a portion of our savings. That was over three years ago and we’re still paying for it!
This is great info Jeff,
I’ve been a member with Vanguard via a former employer for years. I never had any problems with them. No hidden fees/costs and nice returns!
Many if not most financial institutions will waive the associated fees if you opt-in a ACH monthly deposit into your account. They will also waive the mandatory minimum amount required to open the account.
Good call on Vanguard for your brokerage. Vanguard is above the rest of the industry in putting customer interests first. Customer interests being getting maximum diversification at minimum priced, which is what long-term investing is all about. Their customer service can sometimes (not often) feel subpar, but that’s because they run such a low-expense ship.
I have mixed feelings about Betterment. It’s true that the service they provide is useful and their rates are not outrageous, but Vanguard provides the same without charging anything at all in the form of their life-cycle mutual funds. You can definitely do worse than Betterment, but it’s trivially easy to get same results and save the 0.15%-0.35% annually with Vanguard.
When I was in college I started my Roth with Scottrade because only $500 was needed to get going and many funds had no transaction fees. But they had no way to make contributions without mailing in checks or going to the stores and I didn’t make enough money to do direct deposit. When I graduated I moved to Vanguard because I’m a huge fan of their products and the company. The rollover was kind of confusing but they do have dedicated staff that do a lot of the work for you. I haven’t looked back and keep a Roth and traditional IRA with them now.