If you’re looking for the best Roth IRA accounts, you’ve come to the right article! It’s great that you’re planning your retirement now, but which IRA should you open? We’ll go through each of our recommendations right now.
We’ll just jump right into our list of suggestions for the top Roth IRA accounts. Then, we’ll talk more details about the retirement account. However, you may want to get a financial advisor to help you pick among the numerous choices.
It’s a good idea to start planning for your later years as soon as you can. After all, the internet provides so many options at your fingertips. However, you must be smart when choosing your individual retirement account.
The top Roth IRA accounts for 2021
- Charles Schwab – The all-around best retirement fund
- SoFi – For first-time investors
- Fidelity – The best pick for retirement planning
- TD Ameritrade – Retirement investing on the go
- Betterment – Automated investing for retirement
#1. Charles Schwab – The all-around best retirement fund
This investment firm has been running for over 50 years. Yet, it still provides a wide range of quality investment options. That’s why it’s our top pick for the best Roth IRA account!
What’s not to like? Its Roth IRAs provide access to CDs, mutual funds, bonds, stocks, and ETFs. Also, you get these great benefits when you open a Roth IRA at Charles Schwab:
- Zero-dollar minimum deposit
- Wide range of retirement planning tools
- Trading platform for active investors
- Round-the-clock customer service
- User-friendly website
- Brick-and-mortar locations, in case you need face-to-face assistance
- Zero commission fees for stock trades
- No transaction fees when investing in 4,000 mutual funds or more
However, there’s no such thing as a perfect option, even Charles Schwab. For one, the zero commission rule doesn’t apply to the following actions:
- Large block transactions
- Special handling
- Foreign exchange trades
- Mutual funds with transaction fees
- Other fixed-income investments
Whether these will change your mind about Charles Schwab is up to you. Still, it’s our choice for the best Roth IRA account right now!
#2. SoFi – For first-time investors
We said that people should plan their retirement as soon as possible. Yet, it’s not as easy as it sounds. And recent statistics show that others may be thinking the same thing!
What’s more, a 2017 TIAA survey revealed the main reason. It says that 28% of Americans who have IRAs don’t understand them! Are you one of them?
If you are, perhaps you need a beginner-friendly investment platform. In that case, SoFi is the best Roth IRA account choice for first-timers! It provides the following features:
- Low-cost pick for Roth IRAs
- Choose both automated and active Roth IRA accounts
- Both IRA options allow you to consult a human, financial advisor
- Speak with its certified financial planners for free
- Provides resources such as guides and calculators
Its main downside is the limited investment options. SoFi’s offerings are mostly cryptocurrencies, stocks, and ETFs. This may not be the best if you need more.
Read More: How Does Cryptocurrency Trading Work?
#3. Fidelity – The best pick for retirement planning
What if you’re used to investing already? An option like SoFi won’t do. If you’re not choosing Charles Schwab, Fidelity Investments is the next best thing.
It offers more options such as ETFs, stocks, mutual funds, bonds, and CDs. Here are the other nifty benefits you can get from Fidelity’s Roth IRAs:
- Zero minimum deposit
- No commission fees for stock and ETF traders
- Over 3,400 mutual funds with no transaction fees
- Customer service 24 hours a day and seven days a week
- More than 100 branches across the US
What’s more, you get an extra feature when your account has a balance lower than $10,000. It’s called the Fidelity Go. It’s a robo-advisor that can handle assets for you.
Despite offering one of the best Roth IRA accounts, it still has some issues. Specifically, it charges more for some services. Let’s take a closer look at each one:
- If your account has less than $2 million, talking to a human advisor will cost a 0.50% annual fee.
- If you have a balance between $10,000 and $49,999, you must pay the $3 Robo advisor fee every month.
- Some users report outages during heavy trading days.
#4. TD Ameritrade – Retirement investing on the go
Here is another great online platform. As the title says, it lets you invest while on the move. We even featured it in another article about the best investment apps.
The other options on our list also have apps. Yet, they don’t share the same range of investment offerings. You could use the TD Ameritrade app to invest in stocks, options, and ETFs.
With a few taps, see how your portfolio is doing. View basic data such as stock prices, market cap, and trading volume. It will also inform you about the latest happenings on the market.
You may place orders right on the app. Study the upcoming trends, then catch them by investing in promising assets. When you get home, use the website to add these other options:
- Certificates of deposit or CDs
- Forex (Foreign Exchange)
- Mutual funds
This is also great if you want to take charge of managing your Roth IRA. If you use a managed account, be prepared to pay around 0.60% to 0.90% every year.
You’ll have to pay more if you want TD Ameritrade to manage your portfolio on your behalf. For example, you need at least $25,000 in your account for Selective Portfolios.
#5. Betterment – Automated investing for retirement
What if you don’t have time to plan a Roth IRA? We get it. Some folks do plenty of things every day. It might be hard to set aside time looking for assets.
That’s why more people are using robo-investors nowadays. The platform will usually ask a bunch of questions first. It will use your answers to suggest an investment plan.
You may accept it or choose another plan. Then, you’re done! The platform will manage the portfolio for you. If you noticed, the other options on this list offer robo-advisors too.
Betterment doesn’t require an account minimum. However, you’ll have to pay 0.25% for the annual fee. You may have noticed that this seems similar to SoFi or Fidelity.
After all, it also guides investors. Sadly, it doesn’t offer access to a lot of assets. Betterment mainly has bond ETFs and stock ETFs. You may not like this if you want more choices.
What’s more, it focuses on automated trading. If you prefer to be hands-on, you might want to look elsewhere. Otherwise, this is a great pick for the best Roth IRA accounts!
What is an IRA?
It’s a good idea to invest for retirement. You can do that by building a nest egg. In other words, you should invest in all sorts of assets. There’s one problem, though: taxes.
For example, stocks have short-term and long-term capital gains taxes. You’ll have to pay those whenever you invest. Of course, you’ll see this in most countries.
Still, this could eat through your nest egg funds! That’s why the US provides Individual Retirement Arrangements or IRAs. It could help you save enough money for retirement.
They are tax-advantaged accounts. In other words, you’ll pay fewer taxes if you invest using an IRA. You have two choices: Traditional IRA and Roth IRA.
Why should I choose Roth IRAs?
This article talks about the best Roth IRA accounts. That’s why we’ll only talk about those. A Roth IRA’s biggest draw is that your retirement savings grow tax-free.
In your later years, you can enjoy tax-free withdrawals! Those having trouble with personal finance often see it as a good idea. After all, it allows you to make after-tax contributions.
However, it has some flaws. As we said, there is no such thing as a perfect investment. Read further to learn more about the usual issues with Roth IRAs:
- Nondeductible – Your contributions can’t reduce your taxes.
- Early withdrawal penalties – You can’t take out the earnings early. However, you may take out your contributions anytime.
- Not everyone can open an account – You must meet a certain income limit. Also, your modified adjusted gross income should not be higher than the yearly contribution limits.
- Investment limits – You can’t invest in collectibles like gems or artworks. Also, you cannot invest the money in your assets. For example, you can invest in real estate as long as someone else owns it.
You can set up an IRA by going to a bank, life insurance company, mutual fund, or stockbroker. However, you might want to get a financial advisor to help you.
It can be hard to choose among the options out there. What’s more, you’ll have to deal with a lot of terms and conditions. If you’re not careful, you might miss out on great benefits.
An advisor can help you understand the terms, such as account fees. Make sure you get a real one, though. Click here to read a guide to choosing a financial advisor first.
It’s hard to invest if you owe a lot of debts. Thankfully, the financial advisor could help with those, too. They can help you deal with your unpaid credit cards and other balances.
You have other options, though. For example, there’s debt consolidation and settlement. They could help you manage your debts. What’s more, you have do-it-yourself options.
Follow the snowball method or the avalanche method to reduce debts. Getting rid of unpaid balances means having more money for retirement.
Learn more about the best Roth IRAs accounts
Can you lose all your money in a Roth IRA?
If you put bad investments in your Roth IRA, you could lose money in it. This could happen if the assets in yours go down in value. Also, it may happen if you take out money early. All investments have some risk, so make sure you choose carefully.
Is it a good idea to invest in a Roth IRA?
It’s often a good idea to open a Roth IRA for retirement. After all, you get to grow your savings without taxes reducing them. However, it has its share of issues. You can’t lower taxes with it, and you may only invest in certain kinds of assets.
Are Roth IRAs safe?
An IRA only lets you build a nest egg while lowering the taxes. It’s up to you what assets it will contain. If you put bad investments in there, you may lose money. This is why you should plan your retirement carefully and get a financial advisor if needed.