How to Open a Roth IRA (in 5 Easy Steps)

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A Roth IRA is a retirement account that lets you grow your money tax-free and withdraw it tax-free in retirement. It’s a unique kind of savings vehicle because it’s funded with money you’ve already paid taxes on, so you can withdraw your contributions — but not investment returns — at any age without penalty, making Roth IRAs more flexible and versatile than pre-tax 401(k)s and traditional IRAs. 

Additionally, Roth IRAs don’t have required minimum distributions (RMDs), and heirs can inherit them tax-free. They offer tax flexibility in retirement, you can keep contributing to them at any age as long as you’re working, they can serve as a hedge against future tax increases and they can mitigate surtaxes or even eliminate them.

The following Roth IRA guide will explain how to open Roth IRA accounts, detail Roth IRA eligibility criteria, showcase the different kinds of providers and offer tips on how to get the most out of your investments. 

Here’s how to open one in five easy steps.

Step 1: Check Eligibility

Start by confirming your Roth IRA eligibility. You can review the requirements below:

High-income earners who exceed the maximum MAGI requirements can create what’s called a backdoor Roth IRA by making non-deductible contributions to a traditional IRA and converting it to a Roth account.

Step 2: Choose a Provider

Next, you’ll decide between a robo-advisor or full-service broker, both of which offer customized investment recommendations, and a self-directed brokerage, which provides a platform and executes trades but leaves the decisions up to you.

The following are some of the best Roth IRA providers.

• Fidelity: Get started with as little as $1.
• Robinhood: Simple, intuitive platform with a user-friendly interface.
• SoFi: 1% match on qualified contributions.
• Schwab: Excellent customer service.

When conducting your Roth IRA comparison and research, consider criteria like fees, account minimums, investment options, tools and support.

Step 3: Open the Account

Your Roth IRA account setup shouldn’t take more than 15 minutes. Here’s how to open a Roth IRA online: 

Step one: Gather all required documents and information, including your Social Security number, government-issued ID and bank information from the account you’ll use to fund your Roth IRA.Step two: Join the platform of your choice and follow its instructions for opening a Roth IRAStep three: Fill out and submit your application.Step four: Once approved, fund your account and designate your contributions for the correct tax year.

Step 4: Fund the Account

The IRS imposes maximum limits on Roth IRA contributions, which you must keep track of whether you fund your account through bank transfers or do a rollover Roth IRA from a 401(k) or traditional IRA, which is the conversion of a pre-tax account to an after-tax Roth account.

Tip: Try Dollar-Cost Averaging

Invest the same amount on a set schedule–like $100 every other Tuesday. This steady approach helps you buy more when prices are low and less when they’re high.

Funding Roth IRA: What is the Roth IRA Contribution Limit?

The 2025 maximum annual contribution is $7,000 for people under 50.The IRS allows those 50 and older to contribute $8,000, with the extra $1,000 considered “catch-up contributions.”

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Step 5: Invest Your Money

With your account funded, it’s time to choose your investments. A meeting with a financial advisor should precede any investment decision to determine the best Roth IRA investments for you, your age, goals, lifestyle and risk tolerance, especially for those new to investing. However, many experts recommend DIYers pursue low-cost, simple and diversified Roth IRA investments chosen with long-term compounding in mind.

Best Investments for a Roth IRA:

• ETFs
• Index funds
• Mutual funds
• Target-date funds

If you choose a robo-advisor instead, it will auto-allocate your holdings according to your risk tolerance and other factors you input.

Your Roth IRA Journey Begins Now

Roth IRAs are unique savings vehicles that offer tax-free growth, tax-free withdrawals and flexibility. As with all forms of saving, consistency is key. Start small if you’re unsure of your investments and increase contributions as you learn more and revise your strategy. 

Time is every investor’s most potent weapon, so start today — your future self will thank you!

Remember: Opening a Roth IRA takes just five steps: Check eligibility, choose a provider, open the account, fund it, and invest for long-term growth.

Opening a Roth IRA Is Easier Than You Think

Getting started takes just a few minutes and can be done entirely online. With no age requirement, straightforward eligibility rules, and plenty of beginner-friendly providers, opening a Roth IRA is one of the simplest ways to start building long-term wealth. A little time today can set you up for years of tax-free growth.

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