How to open a Roth IRA

A Roth IRA is the single best tool available to us grow our nest egg over time. The best benefit is that the Roth IRA allows us to do that while and withdrawl our money tax free.

Difficulty: Moderately Easy

Instructions

Things You'll Need:

• Bank or brokerage account
• Money

1. 
   Save up some money!

   First you need to have some money saved up to open up a Roth IRA. Depending on where you open it there are different minimum investment amounts, but it can range from $250 to around $1,000 as a minimum investment.

2. The second and probably most important step is deciding where to open your Roth IRA account. In my experience it is a good idea to steer clear of your local bank due to excessive fees. Often the local bank will charge an annual fee for holding the Roth IRA account, and if you have a small amount in the Roth IRA that can make a huge difference!

3. 
   Fidelity is one of the leaders in this space

   Where should you look to open a Roth IRA? Look toward mutual fund companies who specialize in these things. Vanguard, Fidelity, and T. Rowe Price all offer nice programs. Both Vanguard and Fidelity allow you to have a Roth IRA account through them with no annual fees or costs. Check the resources listed below for their websites.

4. The actual process of signing up is very simple and takes very little time. You'll need to indentify all of your information and your beneficiaries and then let them know what exactly you want to invest your Roth IRA in. The process is simple and the rewards are great in the long run!

Tips & Warnings

• Do your research before deciding upon what to invest in when you open your Roth IRA. Ask for advice from a professional if needed.
• Avoid annual fees on Roth IRA's, these can be very hurtful to your long term gains.

[krazigirl79]

on 9/24/2008 Great tips, thanks for the information.

[LilacGirl]

on 9/24/2008 Good suggestions.

[CHAD1]

on 9/24/2008 great tips