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The best Roth IRA accounts of March 2022
As you start thinking about retirement, you’ll likely consider various retirement savings vehicles, namely IRAs, or individual retirement accounts, and 401(k)s. 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.
And for 2022, singles individuals can contribute if they earn $144,000 or less, and married couples are eligible for contributions if they earn $214,000 or less.
You can set up Roth IRAs through most banks, online brokerages, robo advisors, and other investment apps. As with traditional IRAs, these accounts include an annual contribution limit of $6,000, for those under 50, and $7,000 (people 50 and older).
A clear distinction between the traditional and Roth versions, though, is that Roth IRAs allow you to make early withdrawals without receiving 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. When weighing different retirement accounts, you should also check to see if the IRA offers educational resources and retirement planning tools.
Below, we’ve ordered our top picks for the best Roth IRA accounts. We also list each account’s strengths and weaknesses.
Our expert panel for this guide
We consulted financial planning professionals, retirement experts, and our own wealth-building reporter to inform our picks for the best Roth IRA accounts. You can find the full transcript of our interviews with these experts at the bottom of this page.
Business Insider
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.
How our list compares to other publications
Research is a crucial part of selecting the best Roth IRA accounts, and Business Insider isn’t the only website comparing the best retirement accounts. To help narrow down your options, we’ve compared our top choices with lists from other publications.
| Personal Finance Insider | NerdWallet | Investopedia | |
| Charles Schwab | ✓ | ✓ | ✓ |
| Fidelity | ✓ | ✓ | ✓ |
| Merrill Edge | ✓ | ✓ | ✓ |
| TD Ameritrade | ✓ | ✓ | |
| Betterment | ✓ | ✓ | ✓ |
| SoFi | ✓ | ✓ | |
| Wealthfront | ✓ | ✓ | ✓ |
The best Roth IRA accounts of March 2022
Best all around: Charles Schwab IRA
Why it stands out:
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 for retirement planning: Fidelity IRA
Why it stands out: In addition to its Roth IRAs,
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 for active trading: Merrill Edge IRA
Why it stands out:
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 for mobile trading: TD Ameritrade IRA
Why it stands out:
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. And if you’re still not sure whether a Roth IRA is right for you, TD Ameritrade’s IRA Selection Tool will can help you make a decision.
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, though, you’ll pay between 0.60% and 0.90% annually. In addition, TD Ameritrade’s managed portfolios are more expensive. Its Selective Portfolios, for instance, have a $25,000 minimum account size requirement.
Best for robo-advice: Betterment
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%.
This account also allows you to transfer existing Roth IRAs without tax impact. You’ll have access to several socially responsible investment options, and
What to look out for: Betterment has a limited investment selection; it mainly offers stock ETFs and bond ETFs. The investing platform specializes in automated investment management, so it may not be the best fit for active traders and DIY investors.
Best for beginner investors: SoFi Invest
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.
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 for goal planning: Wealthfront IRA
Why it stands out: Though
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 tactics.
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, and why they didn’t make the cut
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.Ally Invest : 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.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.Blooom Automated Investing : This digital investment advisor specializes in account management for retirement plans. It also has no minimum requirements, but account fees can range from $45 to $250 per year.
Frequently asked questions
Why trust our recommendations?
At Personal Finance Insider, our mission is to help smart people make the best decisions with their money. However, the word “best” is often subjective, so in addition to highlighting the clear benefits of a Roth IRA account – low fees or no account minimums, for example – we outline the limitations, too.
We spent hours comparing and contrasting the features and fine print of Roth IRA accounts so you don’t have to.
How did we choose the best Roth IRA accounts?
We reviewed dozens of Roth IRA accounts to determine the strongest options for low fees, investment choices, and retirement planning resources. To make sure we didn’t miss anything, we also cross-referenced our roundup against popular comparison sites like Bankrate and NerdWallet.
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.
What is a Roth IRA account?
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.
And, as of 2022, you can contribute up to an annual maximum of $6,000 if you’re under 50; you can contribute up to $7,000 if you’re age 50 or older. Plus, if you didn’t max out your contributions in 2021, you can continue to contribute up until the April 15 tax filing deadline. The contribution limits are the same for traditional IRAs.
Are Roth IRA accounts worth it?
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 .
You should also consider setting up a Roth IRA if you’re more DIY-minded. That’s not to say that you can’t also set up an employer-sponsored 401(k), though. You can set up both. The difference, however, is that IRAs typically offer access to more investments.
It’s worth noting that 401(k)s feature larger annual contribution limits ($20,500 for 2022).
The experts’ advice on choosing the best Roth IRA account for you
We interviewed the following four 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
- Rickie Houston, wealth-building reporter, Personal Finance Insider
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.
Rickie Houston, Personal Finance Insider:
One of the benefits of a Roth IRA is that they allow you to pay taxes on your contributions now rather than later. This could be great if you’re looking to avoid taxed withdrawals once you reach retirement age. If you’d rather not pay taxes up front, you should consider a traditional IRA.
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.
Rickie Houston, Personal Finance Insider:
If you’re setting up a Roth IRA account through an online brokerage or trading platform, you should be able to do so without paying high account minimums or fees. Good Roth IRA accounts should also offer access to a variety of commission-free investments.
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. [Note: Traditional IRAs don’t have income limits. You could set up a traditional IRA and use your account balance to convert to a Roth IRA. Converting an IRA to a Roth IRA lets you get around the income requirement.]
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.
Rickie Houston, Personal Finance Insider:
Consider opening a Roth IRA if you’d rather not pay taxes on withdrawals in your later years. Roth IRAs can also be advantageous if opened in addition to an employer-sponsored retirement account such as a 401(k).
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.
Rickie Houston, Personal Finance Insider:
Though Roth IRAs allow for early withdrawals, these retirement accounts are best suited for long-term growth. It’s wise to only contribute money that you can afford to not touch until you reach age 59 ½.
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