Start a Roth IRA

You can open a Roth IRA in as few as four steps. Opening a Roth IRA is not as difficult as many people assume, and there are a number of providers who are available to make the process of starting a Roth IRA even easier. The four steps required to open a Roth IRA are:

• Make sure you are eligible for a Roth IRA.
• Make sure a Roth IRA is the best investment option for your situation.
• Choose the type of investment you want for your Roth IRA.
• Choose a provider and fund your Roth IRA.

Make Sure You Are Eligible for a Roth IRA

Not everyone is eligible for a Roth IRA. It is not up to the IRA provider to make sure you're eligible for opening the Roth IRA when someone comes in to start one. Save yourself time and the effort of having to move your money from a Roth IRA by ensuring you are eligible before opening one.

Eligibility requirements are primarily that you've earned a modified adjusted gross income that is under the stated limits. The income limitations change from year to year, and vary depending on your tax filing status (single, married, etc).

Make Sure A Roth IRA is the Best Investment Option for Your Situation

Most financial advisors agree that for the majority of people, a Roth IRA is the better option when compared to the regular IRA because of it holds after-tax dollars. A Roth IRA doesn't provide a deduction on contributions, but if you meet certain requirements all of the earnings in a Roth IRA are tax free when they are withdrawn. Unlike the traditional IRA, the Roth does not require that you begin taking minimum distributions at the age of 70 ½ years either – which means if you have other financial resources in your retirement years, your earnings will continue to grow tax-free until you need them.

Choose the Type of Investment You Want For Your Roth IRA

The best investment type for a Roth IRA will depend on how much money you have to invest, how long you have before you need to withdraw the money, and what other investments you have.

Investment Size: While there are no minimum size limits for opening a Roth IRA by law, IRA providers will usually set a minimum amount that they're willing to work with. If you want to start a Roth IRA with a certain amount and a provider tells you it isn't enough – you can look at other providers until you find one who will do it for you. When starting with a small amount, choose a simple investment that will not cost a lot in fees.

Time: When investing for the long term, it usually pays to take higher risk to obtain higher rewards. Your money has longer to recover if the market loses. If you're closer to retirement age, you'll want to invest with options that help protect your assets.

Other Investments: If you have other retirement investments and savings, you'll want to use the Roth IRA investment selection to help balance out your overall investment portfolio.

Choose a Provider and Fund the Roth IRA

There are numerous options for Roth IRA providers, from banks to mutual fund companies, brokerage firms, and insurance companies. When comparing your options, be sure to ask about what each type of provider charges in fees or if they have minimum investment amounts.

Once you've selected a provider, you can fund your Roth IRA with them and open the account!

Compare accounts and open a Roth IRA today by clicking here.