Guide to Getting the Best Roth IRA Accounts
Investing in a Roth IRA account is a great way to put money away toward retirement. Most experts say that the best time to get a Roth IRA is when you are young, but the truth is that everyone can benefit from a Roth IRA, no matter what age.
Whether you are 25 or 65, Roth IRA accounts offer savings options that anyone can—and should—benefit from.
There are few IRA account options that can match the widespread benefits and ease of investment that an IRA Roth account offers. Savings accumulate tax-free, meaning that account holders won’t have to pay taxes while using their Roth IRA accounts in retirement. Even before retirement, contributions to an IRA Roth account can be made without tax penalties.
The best IRAs are those that offer guidance and support toward retirement savings, meaning that investors often look for the best Roth IRA. Image Source: MyMCMedia
Putting away money for retirement without the frustration of added taxes is a huge benefit to a Roth IRA account. For that reason, there has been a large push for investors to begin diversifying their retirement savings with the best IRA accounts for them.
More often than not, this is equated to finding the best Roth IRA for retirement savings.
To help consumers find the best Roth IRA to grow their savings, our review has compiled a list of the 6 ways to find the best Roth IRA accounts.
This means taking a detailed look at what elements make for the best retirement accounts for your own individual retirement goals. Our review will take an in-depth look at the following ways to locate the best Roth IRA for your retirement savings:
- Look for an IRA account with low or zero fees
- Decide how you will manage your IRA Roth account
- Examine possibilities for trading within IRA accounts
- Look for sign-up promotions or bonuses
- Use the top-rated IRA providers as guides
- Talk to your local bank about their Roth IRA accounts
Each of these expert tips are meant to further elaborate on the components of the best Roth IRA products that are currently offered. Our review acknowledges that much of the process of finding the best IRA accounts also means clearly defining what your personal investing needs and goals are.
Following these tips will not only provide expert guidance toward locating the best IRA accounts to further personal financial goals, but it will also help pinpoint the best Roth IRA to invest in for this year.
What Makes Roth IRA Accounts the Best Retirement Accounts?
It is no secret that an IRA Roth account is one of the best IRA accounts that is currently offered. Rather than investing savings into a traditional IRA account, more and more investors are choosing to look into a Roth IRA account.
There are a few key benefits that Roth IRA accounts offer, and these benefits make them stand out as the best IRA accounts available. The best Roth IRA accounts will offer:
- Tax-free income throughout retirement: This tax-free benefit applies both to contributions and to earnings over time, making a Roth IRA account one of the best IRA accounts available. When considering decades of savings growth, this is an incredibly desirable benefit. The catch, of course, is that those with a Roth IRA account must pay income tax on initial contributions. Instead of using contributions as a tax deduction, any contribution made into this particular IRA account has income tax applied to it. Still, Roth IRA accounts are some of the best IRA accounts, as they allow for savings to grow and be dispersed tax-free.
- Roth IRA accounts are flexible: It is possible to withdraw money before retirement, and as one of the best IRA accounts, an IRA Roth account makes this an easy and flexible process. As long as the investor is at least 59½ years of age, and the IRA account has been open for at least 5 years, withdrawals can be made without taxes. There are even exceptions to this rule, including disability, high medical bills, a first-time home purchase, postsecondary education costs, and paying insurance premiums while unemployed. Roth IRA accounts are widely considered to be the best retirement accounts because of their high flexibility, even before retirement occurs.
- Increased contributions: The typical IRA account will have limits as to when investors are mandated to stop contributing. The best Roth IRA, however, will have no limits. Instead of capping off contributions at the age of 70½, investors with an IRA Roth account can continue adding to their savings for as long as they are earning an income. There are no minimum distributions for this type of IRA account, meaning that investors aren’t mandated to start receiving retirement savings at a certain age. With the best Roth IRA, however, investors can continue working for as long as they want, without the penalties of minimum distributions.
Overall, what makes a Roth IRA account into one of the best retirement accounts is that this type of IRA account is incredibly flexible.
It is built to provide the highest level of savings value for investors, providing tax-free benefits and relaxed rules on contributions and distributions.
6 Ways to Find the Best Roth IRA Accounts
One of the best IRA products to invest in is the Roth IRA account. Image Source: The Simple Dollar
Finding the best IRA is a crucial part for anyone looking to invest into their retirement savings. It can be a difficult and confusing process, but with guidance and patience, finding the best IRA accounts is entirely possible. This will help ensure that your money is not only safe, but that it has the opportunity to grow, without being subject to a litany of tax fees and penalties.
There are many ways to find the best Roth IRA plan, and much of what determines the best IRA depends upon personal preference and individual financial goals. Following our 6 ways to find the best Roth IRA accounts can provide in-depth and expert guidance into how to find the best IRA for your retirement investment.
1. Look for an IRA Account with Low or Zero Fees
Similar to checking and savings accounts, IRA accounts can also come with maintenance fees and minimum balance requirements. The best IRA accounts will avoid implementing these fees as much as possible. For example, Betterment and Wealthfront are two providers of IRA accounts that come with minimum balance fees, called “management fees.”
IRA accounts through Betterment may be subject to 0.15–0.35% in management fees, depending upon the balance. Wealthfront puts their management fees right in the middle, with a 0.25% fee for IRA accounts that do not meet a minimum balance requirement.
In contrast, Fidelity Investments offers one of the best IRA accounts, with a $0 minimum balance and no fees. Vanguard is also known for having some of the best IRA options, with an equally inclusive minimum balance requirement of $0.
Finding the best Roth IRA also means finding ways to invest that avoid tacking on additional payments and fees. By and large, the best IRA accounts will look to supplement the naturally beneficial nature of a Roth IRA account by also offering low or minimum account maintenance fees.
2. Decide How You Will Manage Your IRA Roth Account
Planning out the management methods for your retirement account is a huge factor in pinpointing the best Roth IRA. Image Source: NerdWallet
When looking for the best Roth IRA account, it is important to consider how you want your account managed. Just like a bank account, contributions of up to $5,500 can be made each year. If an investor wants to surpass that amount each year, the best way to do so is by taking the money in their IRA account and investing it.
There are two options when deciding how to keep maintain the best IRA growth possible:
- Independent investing: This is a more hands-on approach, with the investor deciding on how to diversify their account. If an investor prefers to have greater control and involvement in the allocation of their assets, the best IRA account will offer a wide range of investment options, including stock funds and bond funds. The benefit to taking advantage of independent investing is that investors can often avoid heavy brokerage fees by doing the research and legwork on their own. For many investors, having the best IRA account may come hand in hand with having the ability to manage their own investments.
- Managed investing: Some of the best Roth IRA options will include a more hands-off method for those who want to diversify by investing their retirement funds. The best IRA options that specialize in hands-off management are commonly called robo advisors. These robo advisors use a computer algorithm to manage investments according to specifically structured goals. They require zero maintenance, but they often charge a 0.25% maintenance fee.
The ways in which an investor plans on managing a Roth IRA can greatly affect decisions when looking for the best Roth IRA. For some, the best IRA account may mean that they want enhanced involvement in how their funds are actually invested. For others, the best IRAs could come limited or zero involvement with investing.
Ultimately, deciding how the Roth IRA account will be managed is a crucial step toward finding the best IRA for individual investing needs.
3. Examine Possibilities for Trading within IRA Accounts
The best IRAs can also offer enhanced possibilities for stock trading. This means taking a close look at the best IRA account to provide low commission fees and low transaction fees. Each and every provider will have varying rules and regulations regarding these fees, and finding the best IRA for your retirement investments involves finding the fee scale that works best for you.
Trading can be a worthwhile way to increase your IRA investment. The best IRA accounts will keep trading fees as low as possible, particularly within the best Roth IRA options. Most trading fees range between $4.95 and $9.95, but they can easily be higher.
If trading is an important aspect of your Roth IRA account, you will want to ensure that you look for brokers with few limits and lower fees. For example, TradeKing offers low trading fees at $4.95 per trade, and no account minimum. For active traders, this might be one of the best IRA trading options. E-Trade offers increased value for Roth IRA customers, waiving the $500 brokerage fee and charging a relatively modest $9.99 per trade.
For investors who want to diversify their IRA through trading, the best Roth IRA accounts will have low trading fees and minimal brokerage fees. Keep these factors in mind when searching for the best IRA accounts.
4. Look for Sign-Up Promotions or Bonuses
E-Trade is a great example of a provider that offers one of the best IRA promotions. Image Source: Investopedia
When looking for the best IRA options, it may be worthwhile to keep sign-up promotions and bonuses in mind. Many providers will offer these enhanced benefits as a way to encourage new investors to open up an IRA. The best Roth IRA options can come simply from creating an account.
If investors find themselves torn between a handful of options, it is possible that the best IRA may end up being the one that offers the biggest promotion or bonus. Possible sign-up promotions and bonuses to watch out for include:
- Free management through robo advisors: As a robo advisor, Betterment offers hands-off account management, so investors don’t need to worry about actively trading stocks or diversifying their retirement portfolio. They also offer a sign-up promotion that includes 6 months of free account management.
- Promotions for account rollovers: If you choose to roll over an existing IRA, some of the best IRA accounts will give you extra cash. For example, Fidelity Investments offers a 10% IRA match on future contributions with a qualifying rollover or deposit. Similarly, E-Trade offers a $600 cash bonus for an IRA account rollover.
- Introductory free trading: If you plan on using your IRA for trading purposes, some of the best Roth IRA promotions include free trading within your first few months of opening the account. Both TradeKing and Optionshouse offer $1,000 in free commissions when using their trading services.
5. Use the Top-Rated IRA Providers as Guides
While many financial institutions claim to offer the best IRA accounts, a good way to narrow down the best Roth IRA for you is to first take a look at what the top-rated providers are offering. There are a handful of financial institutions that have yielded high amounts of praise from customers and financial experts alike.
Looking at the top-rated, best IRA accounts can be a useful tool in finding the best IRA for your financial investment. A few of the financial institutions that are widely recognized as having the best Roth IRA products are:
- Scottrade: Some perks of their Roth IRA accounts include $7 trades, rollover bonuses, and a large network of mutual funds with no transaction fees.
- E-Trade: Some additional benefits include incentives for opening an account or adding to an existing IRA, no account minimums, and free trades for 60 days with a deposit of $10,000.
- Fidelity: Not only do they offer a wide range of investing options with minimal or zero fees, but Fidelity also has an extensive service listing that expands past Roth IRAs.
- Vanguard: By offering low-cost products and multiple options to diversify IRA accounts, Vanguard has some of the most accessible and best IRA options.
Each and every one of these financial institutions has struck success in offering dynamic IRA Roth account options, and looking into the services they provide can certainly be helpful when searching for the best IRA accounts. No Roth IRA is exactly the same, and these national competitors will find ways to make their individual IRA product into the best Roth IRA possible.
6. Talk to Your Local Bank about Their Roth IRA Accounts
It can be easy to overlook a local bank, but they can be a great resource when looking for the best IRA products. Personal banking has recently expanded from simple checking and savings accounts, and a vast majority of banks will also offer enhanced investment options, including Roth IRAs.
Many personal banking resources will have personalized advisors on hand in the branch office and also offer ways to open up IRA accounts online. For example, Wells Fargo not only provides a thorough overview of a Roth IRA, but also supplies a link to apply online or discuss options with a banking representative. With an established relationship, a branch may even be able to point you in the best direction if their accounts are not the best IRA accounts for you.
Additionally, online banking may be a great resource as well. Ally Bank offers traditional and Roth IRA accounts that have competitive rates, FDIC insurance, and daily compounded interest. As online banking increases in popularity, many online banks have begun offering diverse investment options, making them a great resource in finding the best IRA products.
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Conclusion: Best Roth IRA Accounts
Finding the best IRA, especially early on in life, means making an important investment in future health and security. Image Source: Investopedia
A 2015 survey showed that about 80% of Americans between ages 30–54 didn’t feel that they had acquired enough in their retirement savings. In fact, another study found that 26% of Americans 50–54 had absolutely no retirement savings. These percentages certainly can improve, and Roth IRAs will continue to play a big role in that improvement.
Because of their affordability and their accessibility, the best IRA product to invest in will likely continue to be Roth IRAs. As a result, for older and younger people alike, looking for the best retirement accounts has slowly become synonymous with looking for the best Roth IRA accounts.
By following our guidelines toward finding the best Roth IRA for this year, each and every investor can find themselves well-prepared to start the new year with an improved, efficient, and wholly worthwhile retirement plan.
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