How to Open a Roth IRA (3 BEST PLACES FOR BEGINNERS)

I noticed that one of the retirements accounts I recommend the most, a Roth ira, that I’ve never made a step by step video on how to open one and where to go to open.

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1. Apps that I like and why
– Now these are 3 apps that I recommend just in case you want to have multiple options
– But theirs really only one that I would use

Options: All of these options have fractional shares, that way you don’t need to have a ton of money

M1 Finance: Dynamic rebalancing, Easy to use, and a lot of investments options ( can start with 10%)
Fidelity and Schwab: also solid options with great reputations

Tip: Notice that I didn’t recommend vanguard, because I strongly believe they are one of the best, but not having fractional shares, hold it back from more investors.

2. You still have to pick investments ( Ramit story)
– Theirs a very crazy story about this lady, she spent 6 years sending money over to her Roth ira account thinking she was earning money
– But she never selected any investments and lost out on all those gains because she didn’t understand
– So make sure to select your long term investments well

Video to portfolios: https://www.youtube.com/watch?v=VtNtk6OQTVA&t=329s

3. How to qualify
– You have to have a MAGI ( modified adjusted gross income ) of less than 139k if your single and 206k if your married
– If you make more than that then you can’t qualify to open one
– But only 15.5% of households have an income that high ( and if you, that’s a good problem to have)

Keep mind also:
– That every year they tend to raise the amount for the MAGI
– So if you don’t qualify but just by a few thousand dollars eventually you will most likely

4. Alternatives
– In case you have a high income
– In case you contribute more money
– And and want to get creative

Example:
– Roth 401k: if your company offers a Roth 401k option this is virtually a combination of a 401k and Roth put together. This means you get to invest you’re after tax income and have it grow 100% tax-free.

– Roth conversions: If you already have a 401k or traditional ira and want to roll over that money to a roth ira. You can by rolling the money from a 401k to traditional ira and then rolling over small amounts into a roth ira ( you will be taxed but not that much because of the small amount and also no penalties) – I would roll over what I need for retirement every year. SO 50k a year ( and pay the taxes out of pocket)

– Non-dedutible ira: and if you don’t want to do any of this, you can always contribute into a traditional ira no matter your income, But you might not be able to deduct contributions.

5. Rules and benefits
– Although a Roth is awesome
– It comes with rules and tricks like ever government-issued plan

Rules:
– You can only contribute up to 6k a year and 7k if you are 50 and older (catch up)
– Income too high and you can’t have one
– 5-year rule: wait 5 years per contribution if you converted an ira into a Roth, also to withdraw earning, and if you inherited it ( 10% penalty if not followed)

Benefits:
– Your money grows 100% tax-free
– No RMD ( you can hold forever and past it on to your kids if you wanted to
– No taxes ever again

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*Some of the links and other products that appear on this video are from companies in which Tommy Bryson will earn an affiliate commission or referral bonus. Tommy Bryson is part of an affiliate network and receives compensation for sending traffic to partner sites. The content in this video is accurate as of the posting date. Some of the offers mentioned may no longer be available. I’m an Accountant but I’m not your Accountant, always review information with your Accountant/CPA and your Financial Advisor.

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