A Roth IRA is one of the most powerful retirement accounts available — your money grows completely tax-free, and you never pay taxes on qualified withdrawals in retirement. Opening one takes about 15 minutes. Here’s the step-by-step.
Who can open a Roth IRA
You need earned income — money from a job, freelance work, or self-employment. You cannot contribute more than you earned that year. For 2025, the contribution limit is $7,000 per year ($8,000 if you’re 50 or older). There are also income limits: single filers earning above $161,000 and married filers above $240,000 begin to phase out of eligibility.
Where to open one
The three best options for most beginners:
- Fidelity. No account minimums, zero-fee index funds (FZROX, FXAIX), excellent interface. Best overall for beginners.
- Vanguard. The original index fund company. No minimums for ETFs. Slightly clunkier interface but highly trusted for long-term investing.
- Charles Schwab. No minimums, good app, solid customer service. Strong alternative to Fidelity.
Step 1: Go to the brokerage website and click “Open Account”
Select “Roth IRA” as the account type. You’ll be asked to choose between an individual and a rollover IRA — choose individual unless you’re moving money from an old 401k.
Step 2: Fill in your personal information
Name, address, Social Security number, date of birth, employment information. This takes about 5 minutes. You’ll also set up a username and password.
Step 3: Link your bank account
Connect your checking or savings account so you can fund the IRA. Most brokerages use instant verification via your online banking login, or you can enter your routing and account numbers manually (takes 1–3 business days to verify).
Step 4: Fund your account
Transfer money from your bank account. You can start with as little as $1 at Fidelity or Schwab. If you can, aim to contribute regularly — even $100/month adds up significantly over time with compound growth.
Step 5: Actually invest the money
This is the step most people miss. Depositing money into a Roth IRA doesn’t automatically invest it — it sits in cash until you choose investments. Search for a fund ticker and buy it:
- At Fidelity: buy FZROX (zero expense ratio, total market) or FXAIX (S&P 500)
- At Vanguard: buy VTSAX (total market) or VTI (ETF version)
- At Schwab: buy SWTSX (total market)
Set up automatic monthly contributions and automatic investment if your brokerage allows it. Then leave it alone and let it compound for decades. That’s genuinely the entire strategy.