How to Open a Roth IRA

Decide which brokerage to use

There are many great options to choose from and you're welcome to use whichever brokerage is most convenient for you. There are just a few main criteria to look out for:

• The brokerage should offer low-cost index funds (< 0.1% expense ratio, no purchase fees)
• The minimum investment matches your budget
• There aren’t any maintenance fees or balance requirements

A note on Vanguard

I personally use Vanguard because the firm is investor-owned and does not aim to generate profit for private stakeholders or stock owners. Instead, the profits allow the company to continue offering low-cost investment options.

The educational content from MOMM will largely feature the Vanguard platform but this is not an endorsement of the firm.

Other brokerages

You could also select Fidelity, Schwab, or another institution that fits your current financial situation better.

Open a Roth IRA, step-by-step

See the image carousel below for screenshots of each major step. Note that your specific financial institution may present these steps in a slightly different order or use different language.

For this example, I'll use Vanguard.

1. Navigate to Vanguard.com and click the “Personal investors” link.
2. In the top right corner, click “Open an account”. Follow the steps to sign up.
3. When prompted to select an account type, choose “Retirement investing” and then the “Roth IRA” account type.
4. Fill out all personal identifying information as necessary.
5. Create your username and password.
6. Link your bank and provide initial funds.
7. Disclose how you earn money for investing.
8. Select a purpose – this doesn’t matter too much so choose whichever option sounds best to you.
9. Review your information and sign the electronic agreement.

What to do after opening a Roth IRA

Believe it or not, the hardest part is behind you. Once your funds have transferred over from your bank account, you’re ready to invest your money in index funds.

Learn how to invest in index funds.