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As you start thinking about retirement, you'll likely consider various one of the best retirement plans, namely IRAs and 401(k)s or other retirement plans. Both retirement plans provide tax-advantaged savings options, but you'll fund your account with pre-tax dollars if you choose a traditional IRA or 401k. Roth IRAs, as well as Roth 401(k)s, are funded with after-tax contributions.
You can set up Roth IRAs through most banks, some of the best online brokerages, the best robo advisors, and some of the other best investment apps. As with traditional IRAs, these accounts include an annual contribution limit of $6,500, for those under 50, and $7,500 (people 50 and older).
For 2023, single individuals can contribute if they earn $153,000 or less, and married couples are eligible for contributions if they earn $228,000 or less (the 2022 limits were 144,000 and $214,000, respectively).
Best Roth IRAs
- Charles Schwab IRA: Best all around
- Fidelity IRA: Best for retirement planning
- Merrill Edge IRA: Best for active trading
- TD Ameritrade IRA: Best for mobile trading
- Betterment IRA: Best for automated investing
- SoFi IRA: Best for beginner investors
- Wealthfront IRA: Best for goal planning
A clear distinction between the traditional and Roth versions, though, is that Roth IRAs allow you to make early withdrawals without receiving a monetary penalty. These retirement vehicles also have no age or minimum distribution requirements.
A good Roth IRA account should offer low fees and/or commissions and provide access to several investment options. Keep reading to see our top picks.
Compare the Best Roth IRAs
Why You Should Trust Us: Our Expert Panel on The Best Roth IRA Accounts
We interviewed the following three retirement and investing experts for our guide to the best Roth IRA accounts:
- Charlotte Geletka, CFP, CRPC, managing partner at Silver Penny Financial Planning
- David Brooks, CIS, CHRS, founder and president at Retire SMART
- Tanya Nichols, CFP, founder and president at Align Financial
We're focusing on what makes a Roth IRA account most useful. When comparing accounts, it's important to consider fees, investment choices, retirement planning resources, and more. Here's what they had to say about Roth IRA accounts. (Some text may be lightly edited for clarity.)
What are the advantages and disadvantages of opening a Roth IRA?
Charlotte Geletka, CFP, CRPC:
"Since its inception, many mass media personalities will tell you that the Roth is the only way to go. The Roth IRA is not one size fits all. Roth IRAs [work] best for people who either A) have a very long time horizon until retirement, or B) are in a low tax bracket now and plan to be in a higher tax bracket in retirement."
David Brooks, CIS, CHRS:
"The big advantage that many people don't realize is [that] you can get access to your money at any time with no penalty whatsoever. So if you contribute to a Roth IRA, and you are younger than 59 ½...if you come up on an emergency [and] you need to pull your money back out, you're always entitled to pull out your contributions with no tax and no penalty."
Tanya Nichols, CFP:
"One of the downsides of Roth IRAs is that they're not available to everyone. Individuals earning more than $124,000 annually (in 2020) and married couples earning more than $196,000 may not be eligible to make full contributions, which diminishes the potential benefits."
What makes a Roth IRA account good or not good?
Charlotte Geletka, CFP, CRPC:
"If you have a Roth IRA in retirement, it is a great way to take distributions without increasing your tax bracket and utilize tax planning strategies. A Roth IRA is a really powerful retirement savings tool, but it is not one size fits all. That's why it is a great idea to speak to a financial advisor."
David Brooks, CIS, CHRS:
"The Roth has huge advantages for younger investors over a traditional IRA. The myth is that you'll be in a lower tax bracket when you're retired, so that's why the traditional side is so popular. But I can tell you, from two-plus decades of doing retirement-specific planning, that's a lie."
Tanya Nichols, CFP:
"A Roth IRA is not inherently good or bad. Like all financial vehicles, the pros and cons should be considered in light of each person's financial circumstances and objectives. The benefits can vary meaningfully depending on your income, age, current tax rate, and future prospects."
Who should open a Roth IRA account?
Charlotte Geletka, CFP, CRPC:
"Young people who have a long time horizon to let the money grow. It also works well for people who have less income now but anticipate a significant increase in salary as they advance in their career."
David Brooks, CIS, CHRS:
"Everyone. And I mean everyone. There's some confusion behind who can have a Roth IRA as well. Some people believe [that] because they don't have any income, or they have too much income, they're not entitled to have a Roth IRA. That is incorrect."
Tanya Nichols, CFP:
"If you think your future tax bracket will be higher than your current tax bracket and you can maximize your contributions to a Roth IRA based on your current income level, you're likely to benefit from the tax-free withdrawal feature in retirement.
"It's not a great tool unless it's really designated for long-term retirement savings."
Is there any other advice you'd offer someone who's considering opening a Roth IRA?
Charlotte Geletka, CFP, CRPC:
"Another cool thing about a Roth is that you have until April of the following year to see if you are eligible to contribute to a Roth and have the additional savings to contribute to a Roth."
David Brooks, CIS, CHRS:
"Understand what the fees and expenses are going to be on your account. There is nothing wrong with paying for quality advice, but do not open an account with a commission-based broker. In my opinion, I think you would rather use a fiduciary."
Tanya Nichols, CFP:
"Before you decide which savings tool you're going to use - make sure you have a savings account of up to 90 days of living expenses set aside, and that you don't have any revolving credit card debt. Good habits about spending are just as important (maybe even more) than saving.
"Make sure that you know that the money you're putting aside is money that should in fact be set aside for a really long time."
Methodology: How we Reviewed The Best Roth IRAs
We reviewed a dozen Roth IRA accounts to determine the strongest options for low fees, investment choices, and retirement planning resources.
We also considered whether each financial institution offered self-directed and/or automated retirement accounts. We looked into other factors, including customer service support, mobile access and financial planner access.
See our full methodology for rating investment platforms »
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Charles Schwab IRA
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Fidelity IRA
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Merrill Edge IRA
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TD Ameritrade IRA
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Betterment IRA
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SoFi IRA
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Wealthfront IRA
Roth IRA Frequently Asked Questions (FAQs)
Roth IRAs are tax-advantaged retirement savings accounts that allow you to make after-tax contributions without meeting minimum distribution requirements. Whereas traditional IRAs are tax-deferred vehicles that rely on pre-tax dollars, Roth IRAs allow your money to grow tax-free. This means you won't have to pay taxes or penalties on any withdrawals after age 59 ½.
That depends on your particular financial situation and savings goals. For instance, if you expect to pay more in taxes as you get older, a Roth IRA could be more suitable than a traditional IRA. This is because you'll pay immediate taxes on any contributions you make. Once you reach age 59 ½ , you won't have to pay taxes on any withdrawals. You could incur a large tax bill if you defer your account's taxes until age 59 ½ .
Best Roth IRA All-Around
Why it stands out: Schwab offers a wide variety of investment options for those with retirement accounts. Roth IRAs – which are free to set up and maintain – include the following investments: stocks, bonds, CDs, ETFs, and mutual funds. Whether or not you set up a Roth IRA here, you can view Schwab's retirement educational content. And you'll receive more retirement-planning resources and tools after you set up your account.
Schwab provides 24/7 customer service, and its website is pretty easy to navigate.
What to look out for: The $0 commission rule doesn't apply to large block transactions that require restricted stock transactions, special handling, trades placed on a foreign exchange, transaction-fee mutual funds, futures, and other fixed income investments.
Best Roth IRA for Retirement Planning
Why it stands out: In addition to its Roth IRAs, Fidelity offers several other retirement accounts, including traditional IRAs, rollover IRAs, Roth IRAs for kids, and small business retirement plans. Roth IRAs come without account fees or minimums, and all trades are commission-free.
Fidelity also offers thousands of mutual funds, and the brokerage has a robo-advisor, Fidelity Go, that specializes in automated investing and retirement assistance. Furthermore, it's worth pointing out that Fidelity provides several retirement resources and tools to help you with planning.
What to look out for: If you choose Fidelity Go, you'll pay $0 as long as you've got an account balance below $10,000. You'll incur a $3 robo-advisor fee if your balance is between $10,000 and $49,000, and you'll pay a 0.35% fee if you've got more than $50,000.
Best Roth IRA for Active Trading
Why it stands out: Merrill Edge's Roth IRAs are completely free to set up. They come without account balance minimums, and they include access to stocks, bonds, options, ETFs, and mutual funds. Another perk of Merrill Edge is that it gives you the choice between three investment platforms: Merrill Edge Self-Directed, Merrill Guided Investing, or Merrill Guided Investing with an advisor.
You'll have access to other retirement accounts, and you can take advantage of 24/7 customer service support and live chat. If you invest in a new Merrill Edge Self-Directed account, you can get up to $600.
What to look out for: Self-directed Roth IRA accounts come with $o trading fees and commissions, but you'll pay more to set up a professionally managed portfolio. For example, Merrill Edge's Guided Investing fees range from 0.45% to 0.85%.
Best Roth IRA for Mobile Trading
Why it stands out: TD Ameritrade's Roth IRAs are free to open, and you can choose from several commission-free ETFs, fixed income investments, and no-transaction-fee mutual funds. You can also utilize educational resources such as exclusive videos and webcasts.
In addition, you can skip out on account fees, and you'll have access to third-party research and analysis from Morningstar Investment Management, CFRA, and Market Edge. But prospective investors should note that TD Ameritrade's managed portfolios — Essential Portfolios, Selective Portfolios, and Managed Portfolios — are no longer available to new clients.
Since Schwab's acquisition of TD Ameritrade, many of the brokerage's products have merged with Schwab's. You'll now have to set up any managed accounts through Schwab. Both of Schwab's automated investing accounts (Schwab Intelligent Portfolios and Schwab Intelligent Portfolios Premium) are compatible with traditional IRAs, Roth IRAs, SIMPLE IRAs, SEP IRAs, and Inherited IRAs.
What to look out for: You won't pay any fees for a self-directed Roth IRA. If you choose to use a managed account through Schwab, though, you'll pay a one-time $300 fee and a $30 monthly fee for Schwab Intelligent Portfolios Premium. There aren't any advisory fees for Schwab Intelligent Portfolios.
Best Roth IRA for Automated Investing
Why it stands out: Betterment offers personalized investing and retirement resources to help its users meet specific savings goals. As with the other Roth IRA accounts, you won't have to meet minimum account size requirements, but you will be responsible for an annual fee of 0.25% and a minimum of $10 to start investing.
This account also allows you to complete a direct IRA transfer, which does not have any tax impact. You'll have access to several crypto portfolios and socially responsible investment options, and Betterment will automatically rebalance your account and reinvest dividends on your behalf. Plus, the robo-advisor offers multiple other portfolios — Betterment Core, Goldman Sachs Smart Beta, and Innovative Technology — that mix your funds into a diversified collection of assets with different market goals.
What to look out for: The investing platform specializes in automated investment management, so it may not be the best fit for active traders and DIY investors.
Best Roth IRA for Beginner Investors
Why it stands out: SoFi is a competitive, low-cost choice for those interested in opening a Roth IRA. The company provides both active and automated IRA accounts, and any stock and ETF trades you make are commission-free. Roth IRAs at SoFi also come with free access to certified financial planners (CFPs). And all retirement accounts – whether active or automated – include the option of human advisor consultations.
SoFi also provides several other spending and saving account options, and the company offers several guides, calculators, and resources for account holders. Overall, the investment platform offers both active and automated Roth, traditional, and SEP IRAs.
Note, however, that while SoFi offers cryptocurrency trading, you can't currently invest in crypto assets with your IRA account.
What to look out for: Besides its cryptocurrency offerings, SoFi primarily offers stocks and ETFs. If you're looking for other investments, such as mutual funds, this advisor may not be the best fit.
Best Roth IRA for Goal Planning
Why it stands out: Though Wealthfront's investment services feature a 0.25% annual fee and $500 minimum deposit, the robo-advisor offers a wide range of account types and investment strategies. In addition to its Roth IRAs, Wealthfront offers traditional IRAs, SEP IRAs, 401(k) rollovers, crypto trusts, 529 college savings plans, and multiple taxable accounts. The advisor even offers a high-interest cash account.
If you're thinking of setting up a Roth IRA here, you can do so without paying any trading commissions. You'll also be able to take advantage of goal-based planning and tax-loss harvesting. You'll need a higher account balance to utilize strategies such as stock-level tax-loss harvesting, risk parity, and smart beta investing.
What to look out for: You can't open a Roth IRA with Wealthfront unless you've got at least $500. You'll also have to pay a 0.25% account fee, and – if you utilize the advisor's low-cost investment funds – you'll pay a 0.13% fee.
Other Roth IRA Accounts We Considered
- Interactive Brokers: You probably won't have trouble finding a suitable account at Interactive Brokers. The brokerage offers the following retirement accounts: Roth IRAs, Roth Inherited IRAs, traditional IRAs, traditional inherited IRAs, traditional rollover IRAs, and SEP IRAs. The only drawback is the cost. You'll need at least $5,000 to set up your Roth IRA.
- Vanguard: Vanguard is also a competitive option for investing and retirement accounts, but most of its retirement funds require at least $1,000 to get started.
- AllyInvest: AllyInvest requires no account minimums, and it offers commission-free trades on stocks, options, and ETFs. The company also provides several other investment options, but it falls short when it comes to no-transaction-fee mutual funds.
- E*TRADE: In addition to traditional IRAs, E*TRADE's IRA selection includes Roth IRAs, rollover IRAs, beneficiary IRAs, IRAs for Minors, and E*TRADE Complete IRAs. Its IRAs also don't have any minimum requirements (unless you use Core Portfolios to automate them), but you'll pay $19.99 each for transaction fee mutual funds, and you'll incur a $49.99 charge if you hold no-load, no-transaction fee funds for less than 90 days.
- M1 Finance: This investing platform provides several competitive features – automated investing, fractional shares, and low trading fees – but you won't have access to professional financial planners. You'll also need a $500 initial minimum investment for retirement accounts.
- tastytrade: This online brokerage offers a wide selection of IRAs, including a Roth IRA, traditional IRAs, SEP IRAs, and beneficiary IRAs. Its main focus is on options and futures trading, but it also offers stocks, ETFs, and cryptocurrencies.
- Ameriprise Financial Investments: Ameriprise Financial Services is an independent broker/firm that offers multiple managed investment accounts that can be opened as a traditional IRA, Roth IRA, Simple IRAs, SEP IRAs, or as a college savings account.