How Do I Open a Roth IRA?

Written by Andrea Coombes
Edited by Carolyn Kimball
Fact-checked by Dayana Yochim

March 14, 2024

Opening an IRA is a lot like opening a bank account, with one big difference: You'll choose investments so your savings can grow and support your luxe retirement lifestyle, or really any retirement lifestyle you choose.

Quick take: Opening a Roth IRA is super easy.

1. Make sure you're eligible
2. Open your Roth IRA account at a brokerage
3. Transfer money into your account
4. Pick your investments
5. Set up auto-saving

Tell me more! Let's dive into the details of how to open, and invest, your Roth IRA:

1. Make sure you’re eligible. There are income limitations. If you're a single filer, the amount you can contribute to a Roth IRA starts to get reduced at $146,000 of modified AGI and you can't contribute at all if your income tops $161,000. For a married-filing-jointly person, the phase-out starts at $230,000 of modified AGI and contributions are prohibited if income is more than $240,000.
2. Open your account at a brokerage. You can open Roth IRAs at many banks, but your best bet is an investment account so you can, you know, invest your money. If you’re not sure which broker is right for you, check out the roundup of the best brokers for IRAs on our sister site, StockBrokers.com. When you set up your account, make sure you pick the “Roth IRA” option.
3. Transfer money to your new Roth IRA. Most brokers let you open an account with $0, so you can start with just, say, $50. (The one caveat is the investment you choose may have a higher minimum; for example, some mutual funds have a $1,000 minimum initial investment.) The maximum you can contribute currently is $7,000 per year into your Roth IRA, plus an extra $1,000 if you’re 50 or older. Those contribution limits often increase each year so keep an eye on that if you’re one of those maximal savings types.
4. Pick your investments. Simplest option? Choose a target-date fund. These one-stop shops provide a diversified portfolio that gradually gets more conservative as you approach retirement. Check out our story on investing for retirement for more ideas.
5. Set up auto-saving. By transferring a set amount from your checking or savings account to your Roth IRA every month, you are paying yourself first. So. Very. Smart. And it can be a small amount, such as $25. Go do it now. And then go sip that cocktail/mocktail on the beach and rest easy knowing you have taken a huge step in planning for your future.

Bottom line: An IRA — traditional or Roth — is a great way to save for retirement. While you don't get the upfront tax deduction available with a traditional IRA, with a Roth all of your retirement withdrawals are tax-free. And opening a Roth is easy peasy. You got this.

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