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A Roth individual retirement account (IRA) can elevate your retirement saving strategy.
Our analysis of the best Roth IRA accounts in 2024 considers the broad features banks, brokerages and emerging financial technology (fintech) firms provide alongside these accounts. We take a “whole-firm” approach because most Roth IRA providers offer similar features not only for your Roth but for many of your other money needs as well.
To find the best Roth IRA for 2024, we get specific and situational on key considerations, such as fees and support. As it turns out, old-school firms such as Vanguard are keeping up with the innovation pioneered by robo-advisors, led by Betterment initially and, more recently, SoFi.
Methodology
To narrow down our list of the best Roth IRA accounts for 2024, we analyzed:
- Variety of low- or no-cost investment options
- Account fees and minimums
- Robo-advisory (automated) services and support
- Personal advisory services and support
The best Roth IRAs for 2024
After a thorough review of this competitive landscape, we narrowed our list of the best Roth IRAs for 2024 to five. This doesn’t mean the top five, however, because the number-one Roth IRA for your needs might not be the number-one Roth IRA for another person’s needs.
So, in no particular order, but with diverse circumstances thoughtfully considered, these are the best Roth IRAs in 2024.
SoFi
SoFi is our top choice for investors who want a one-stop shop for all of their banking and investing.
Account overview:
- Account fees and minimum: $1 account minimum, no management fees
- Robo-advisory option: Yes
- Personal advisory option: Yes
The details: Back in the day, you kept your IRA at a mutual fund company, your stock investments with a broker and your checking and savings at a bank you visited — to speak to a human — multiple times a month. Those days are long gone. Today, everything can be in one place. If you’re the type who wants to go all-in online, SoFi is our top pick for you.
There’s something about viewing your Roth IRA account in the same online platform as your checking and savings accounts, other investing activity, and even loans and credit cards. It can help make retirement feel less daunting and retirement accounts a less foreign part of your personal finance. SoFi doesn’t treat IRAs as isolated, standalone products. It presents them as part of a comprehensive view of your finances, offering all of the above and more.
Unlimited, fee-free access to certified financial planners (CFPs) puts SoFi over the top. SoFi’s CFPs are fiduciaries, meaning they must act with your best interests in mind. They don’t receive commissions to sell certain products. You can get Roth IRA-specific guidance as well as advice on other areas of your financial planning, including debt management and home ownership. We checked SoFi’s scheduler and, as of November 2023, there were plenty of time slots available to set up a call with a CFP.
You can use SoFi’s self-directed, personal advisory service, which has no account minimum, alongside automated investing for your Roth IRA (and other investments). With its automated IRA, SoFi’s robo-advisor customizes and regularly updates a mix of investments based on your goals, timeline and risk profile. These services are always commission-free.
One downside at SoFi: While some of the ETFs the company uses to automate investment selection have low expense ratios, others, particularly actively managed exchange-traded funds (ETFs), carry relatively high expense ratios. SoFi’s proprietary ETFs have an average expense ratio of 0.40%.
An expense ratio is the annual management cost incurred by a fund. With an expense ratio of 0.40%, you’ll pay $40 in fees per $10,000 invested.
Betterment
Betterment is our runner-up for investors looking for a one-stop banking and investing shop.
Account overview:
- Account fees and minimum: No account minimum, 0.25% annual fee or $4/month for account management
- Robo-advisory option: Yes
- Personal advisory option: Yes
While Betterment doesn’t get into as much personal finance as SoFi (for example, it doesn’t offer loans or credit cards), it does provide competitive banking services alongside the option for one-on-one financial advisory.
Unlike SoFi, Betterment charges either a 0.25% annual fee or $4 per month, depending on your combined household balance, for robo-advisory on Roth IRAs and other accounts. If you’d like unlimited, one-on-one financial advisory from fiduciaries at Betterment, it will cost you to the tune of a 0.40% annual fee and require a $100,000 minimum balance.
Betterment offers a wide range of ETF portfolios via its automated and do-it-yourself options. Many of these portfolios, particularly its Core Portfolio, use ETFs from large firms, such as Vanguard, resulting in expense ratios that generally range between 0.05% and 0.20%, depending on the portfolio and specific stock and bond allocation you choose.
Vanguard
Vanguard is our top choice for investors who only want to invest in broad, low-cost index funds.
Account overview:
- Account fees and minimum: $0 to open account; minimums vary, ranging from $1 for Vanguard ETFs to up to $3,000 on other products
- Robo-advisory option: Yes
- Personal advisory option: Yes
The details: If you’re a do-it-yourself, no frills type of investor, you might not have much need for SoFi’s banking bells and whistles, opting instead for the veteran Vanguard.
When we say no frills, we mean keeping your Roth IRA invested in the broad stock market. This can be as simple as owning the stocks that comprise the S&P 500, an index of the 500 largest companies trading on U.S. stock exchanges. History shows this can be a solid long-term strategy that is particularly suited for retirement accounts, such as a Roth IRA.
Vanguard’s S&P 500 ETF — ticker symbol VOO — attempts to closely track the S&P 500’s returns and has generated a nearly 70% gain over the last five years, as of October 2023. VOO’s expense ratio is just 0.03%. The average expense ratio across all Vanguard ETFs is 0.05%, which equates to just $5 in fees per $10,000 invested. That’s saying something, especially when you take actively managed ETFs into account. Expense ratios for Vanguard ETFs are 80% lower than the industry average beyond Vanguard’s offerings.
Bottom line: If you open a Vanguard Roth IRA and buy Vanguard ETFs, you’ll face no account minimums, no commissions and low expense ratios. Vanguard is also competitive on fees and minimums if you own funds from other companies.
The biggest negative we found at Vanguard is that it charges hefty advisory fees. If you want robo-advisory for your Roth IRA, there’s a $3,000 minimum required for a Vanguard Digital Advisor account, plus an annual fee of approximately $15 for every $10,000 invested. However, Vanguard does waive advisory fees for 90 days, as of November 2023.
Vanguard offers three levels of one-on-one financial advisory at a price. You’ll need at least $50,000 for access to an advisor. Plus, you’ll pay an annual advisory fee of approximately $30 per $10,000 invested. For a dedicated advisor and personal trust services, the balance requirement is $500,000, plus an annual advisory fee of no more than $30 per $10,000 invested. High-rollers need $5 million or more for all of the above, plus access to a team of specialists, charitable giving advice as well as wealth, estate and legacy planning services.
Charles Schwab
Charles Schwab is our top choice for investors who want robo-advisory from a traditional firm with a wide range of low-cost ETFs.
Account overview:
- Account fees and minimum: $0 to open Roth IRA; $5,000 for robo-advisory
- Robo-advisory option: Yes
- Personal advisory option: Yes
The details: If you only want robo-advisory services, Schwab beats out Vanguard and others, primarily because Schwab does not charge an advisory fee for its Intelligent Portfolios (robo-advisory) service, relative to 0.25% fees at fintech firms Betterment and Wealthfront and a 0.35% fee at Fidelity on balances of $25,000 or more. Plus, unlike these three competitors, Schwab provides 24/7, US-based phone and chat support and a superior onboarding process. However, Schwab’s $5,000 minimum to utilize its robo-advisory service might be an obstacle to entry for some investors.
Schwab stands apart from its robo-advisory competitors in that it allows you to get an idea of what your automated Roth IRA portfolio will look like before creating an account. At every other robo-advisor we tested, you had to set up an account, often with personal and banking details, prior to answering the qualifying questions about your investment preferences, goals and concerns that guide the composition of your investment plan. Or you only answer limited questions prior to the prompt to log in or create an account. Schwab’s questions were also the most in-depth, hitting concerns such as how much of a loss you’d be comfortable absorbing during a stock market downturn.
At the end of this process, Schwab gives you a choice between the Intelligent Portfolios service with no advisory fee and a $5,000 minimum or a premium service with a minimum requirement of $25,000 that includes unlimited one-on-one guidance for a one-time fee of $300, then $30 a month.
Like Vanguard, Schwab’s in-house ETFs (the ones you can own in your Roth IRA via its robo-advisor option) have relatively low expense ratios. Eighty-five percent of Schwab’s market-tracking index ETFs have expense ratios of less than 0.10%.
Fidelity
Fidelity is our runner-up for investors looking for robo-advisory from a traditional firm along with plenty of low-cost ETFs.
Account overview:
- Account fees and minimum: $0 to open an account, $1 to invest; no management on balances less than $25,000, 0.35% annual fee on $25,000 or more
- Robo-advisory option: Yes
- Personal advisory option: Yes
Fidelity’s Roth IRA requires no minimum to open an account and just $1 to start investing. However, as our best Roth IRAs for 2024 selections make clear, this is pretty much an industry standard. The costs associated with investing enter the equation when you seek automated or one-on-one guidance.
FidelityGo provides robo-advisory services with no advisory fees for balances less than $25,000 and a 0.35% annual fee for balances of $25,000 or more. This fee includes unlimited one-on-one financial planning and advisory services. There’s no minimum to open a FidelityGo account, but you do need at least $10 to invest. Fidelity provides access to a team of financial advisors with a $50,000 minimum investment and a dedicated advisor at $500,000.Like Schwab and Vanguard, Fidelity’s funds have relatively low expense ratios. For example, Fidelity’s S&P 500 mutual fund, though not an ETF, has an expense ratio of 0.015%. Fidelity builds its robo-advisor portfolios with an assortment of proprietary passive and active Fidelity Flex Funds, which can include domestic and global stocks, bonds and short-term investments, and carry zero expense ratios.
What is a Roth IRA?
Unlike a traditional IRA, a Roth IRA does not permit tax-deductible contributions. Rather, you invest in a Roth IRA with after-tax money. The tax benefit of a Roth IRA comes when you withdraw your money, generally in retirement. When you withdraw money from a Roth IRA, you receive the distributions — your original contributions and earnings — tax-free, assuming you play by IRS rules.
A key benefit of all IRAs, including Roth IRAs, is tax-deferred growth of your earnings, or the income generated by the investments in your portfolio. Earnings might include interest on a certificate of deposit (CD), capital gains from selling a stock or dividends paid by stocks you own.
You can leave your money in a Roth IRA for as long as you live. This feature makes Roth IRAs distinct from traditional IRAs, which have more extensive rules and restrictions around required distributions that can affect contributions in retirement.
How to invest in a Roth IRA
Technically, a Roth IRA isn’t an investment in and of itself. It’s a retirement account that contains the investments you choose to keep in it. Outside of Roth IRA-specific eligibility rules, contribution limits and tax benefits, think of a Roth IRA like a brokerage account where you can buy and sell everything from stocks and bonds to ETFs and mutual funds to more conservative investments, such as CDs.
As our analysis of the five best Roth IRAs for 2024 details, you can find Roth IRA accounts at various levels of service and support.
- Do-it-yourself: For self-directed investors, you open a Roth IRA and make investment choices on your own.
- Fully automated: Robo-advisory is available for investors who prefer to set it and forget it. At firms that offer robo-advisory (also known as automated investing), you answer a few questions about your investing experience, timeline and goals, and receive a portfolio, often consisting of ETFs, that fits your profile. Many robo-advisors automatically update your portfolio as you age, as your situation changes or at your request.
- One-on-one support: Whether it’s access to a team of financial advisors or a dedicated pro, you generally must meet a relatively large minimum account balance to qualify for one-on-one support at most firms.
Most companies require basic information — driver’s license, Social Security number, banking details, employment and beneficiary information — to open a Roth IRA account.
Roth IRA eligibility
The IRS uses your tax filing status and modified adjusted gross income (MAGI) to determine Roth IRA eligibility.
For the 2024 tax year, married-filing-jointly taxpayers earning $240,000 or more and single and head-of-household filers making $161,000 or more cannot contribute to a Roth IRA. Below these thresholds, the IRS increases the contribution amount. As of 2024, you can make a full contribution if you earn less than $230,000 with married-filing-jointly status and less than $146,000 as a single or head-of-household filer.
This IRS worksheet helps you determine the exact amount of a reduced Roth IRA contribution.
Roth IRA contribution limits
In 2024, the most you can contribute to all of your IRAs (traditional and Roth combined) is $7,000. However, if you’re 50 years of age or older, the IRS allows annual catch-up contributions of $1,000, bringing the combined traditional and Roth IRA contribution limit to $8,000. This is up from 2023 when the maximum was $6,500, plus the $1,000 catch-up for taxpayers 50 and older. The IRS did not change the catch-up contribution of $1,000 between 2023 and 2024.
Roth IRA transfers and rollovers
As indicated in our list of the best Roth IRAs for 2024, you may need a minimum account balance that exceeds the annual IRA contribution limit to access some advisory features. Therefore, you’ll either have to accumulate the necessary balance over time or bring ample money from an existing account to the new institution.
If you transfer assets from an existing Roth IRA at one firm to a new Roth IRA at another firm, this is generally not a taxable event. If you don’t access the funds and keep the account type the same, you can transfer money without consequence.
Rollovers — say, from a 401(k) to a Roth IRA — work differently. They can be complicated and might result in tax consequences from Uncle Sam. This IRS chart shows the accounts you can conduct rollovers between. From there, consult your financial advisor, accountant, current investment firm or workplace retirement plan administrator for specifics on your situation.
Frequently asked questions (FAQs)
As with most accounts, the investments you hold in your Roth IRA can lose money. However, look for signs that the bank or brokerage where you keep your Roth IRA takes steps to help protect your funds.
All five of the firms — Vanguard, Schwab, Fidelity, SoFi and Betterment — that offer our best Roth IRAs for 2024 are Securities Investor Protection Corporation (SIPC) members. The SIPC is a non-profit organization, created by the Securities Investor Protection Act, that “oversees the liquidation of member firms that close when the firm is bankrupt or in financial trouble, and customer assets are missing.”
However, as Schwab notes, “According to SIPC, most broker-dealer failures happen with no securities missing. Since their inception over 50 years ago, 99% of eligible investors got their investments back in the failed brokerage firms cases that it has handled.” In the unlikely event one of these firms collapses, the SIPC is there to help protect investors.
Similar in theory, but distinct from the SPIC, the Federal Deposit Insurance Corporation (FDIC), insures deposit accounts (e.g., checking and savings accounts) at all five firms discussed in this guide.
No, they don’t. You can keep money in your Roth IRA as long as you live. When you die, your beneficiaries will have to eventually take distributions from your Roth IRA. However, in most cases, they will not be taxed on these withdrawals.
While the IRS never taxes Roth IRA contributions (because they were already taxed when you made them), in some cases, it can tax earnings and even apply an additional 10% penalty to withdrawals that don’t meet the so-called “five-year rule.” To avoid taxes and the penalty, not only do you have to be at least 59 1/2 when you start taking Roth IRA distributions, but your account must also be at least five years old. If you’re older than 59 1/2 and have not owned your account for at least five years, you won’t pay a penalty, but you will pay taxes on your Roth earnings. Some exceptions exist to this rule, such as using some of your Roth money to fund a first-time home purchase.
Yes. As long as you’re eligible and do not exceed the annual contribution limits, you can have more than one IRA, including a mix of Roth and traditional IRAs. If you make excess contributions to your IRAs, the IRS can charge a tax penalty.
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