Looking for the best Roth IRA accounts? Playbook, Charles Schwab and Fidelity Investments top Benzinga’s list this year.
Whether you feel on track for retirement or need to do some catching up, the best Roth IRA accounts offer another option for saving and preparing. Opening one of these accounts can help you increase your nest egg but with different maximums, limits and investment options than other retirement accounts. Get started fast with these leading account providers.
Quick Look: Best Roth IRA Accounts
- Best for Tax Strategies While Maximizing Retirement Savings: Playbook
- Best for Holistic Approach to Retirement Savings: Charles Schwab
- Best for $0 Minimum to Get Started: Fidelity Investments
- Best for Account Type Options: Merrill Edge
- Best for Hands-off Investing: Betterment
- Best for Robo-Advisor Account: Wealthfront Inc.
Best Roth IRA Accounts
The best Roth IRAs provide access to a variety of investment options with support to guide you in knowing how you’re doing saving toward retirement and what you need to do to improve. Here’s a look at the leading options.
1. Best for Tax Strategies While Maximizing Retirement Savings: Playbook
You have a great deal to consider when planning for retirement while balancing the funds you need today. The app aids in asset allocation so you know whether you should be placing savings in an IRA, 401(k), health savings account (HSA) or account that you’ll pay taxes on this year. Optimizing where you place your money can increase your savings by thousands of dollars throughout your 40-plus years of employment and beyond. The account benefits high earners the most because their tax liability has the potential to be far higher than an individual with an average earning amount.
Why Benzinga likes it: You can save toward retirement while lowering your taxes now to enjoy the life you want.
Pros
- Free trial offers full access to the software so you can see what you’ll get
- Tax-efficient saving
- Flat fees benefit people with $300,000 or more to invest
- Get a guideline for what account type to place your money in for the best tax benefits and savings
Cons
- Plans start at $29 per month that could otherwise go into your retirement accounts
- Not ideal for self-employed people or contractors whose income fluctuates or has seasonality
2. Best for Holistic Approach to Retirement Savings: Charles Schwab IRA
Other account fees, fund expenses, and brokerage commissions may apply.
Enjoy access to a variety of investment vehicles with your Roth IRA account, including stocks, bonds, certificates of deposit (CDs), exchange-traded funds (ETFs) and mutual funds. Charles Schwab is a leader in investing because it offers simplified trading techniques with tax-efficient advice. You can learn about your risk and make investment updates accordingly to form a powerhouse account that will help you live the way you want to in retirement.
Why Benzinga likes it: Your account comes with support like tax calculators, real-time market data and retirement specialists ready to help.
Pros
- 24/7 customer support
- User interface is clean and clear for ease of getting started
- Outstanding account security
Cons
- While most transactions have a $0 commission rule, you have to watch out for others that come with fees and commissions
- No direct access to invest in cryptocurrencies
- $5,000 minimum to get started
3. Best for $0 Minimum to Get Started: Fidelity Investments
While you might see the value that a Roth IRA can have, you also might not have the upfront cash required to get started with most investment banks. But at Fidelity, you can open your account and fund it slowly as you have the money.
Why Benzinga likes it: Fidelity is user-friendly and ideal for those getting started with investing or ready to advance their skills thanks to its account features and support.
Pros
- Intuitive and interactive chatbot can answer many basic questions fast and 24/7
- Offers many helpful articles and features to guide you in planning for retirement
- Enjoy flexibility in how you manage your account, including robo-advisor, self-directed or advisor-guided
- Wide selection of investments
- Mutual funds with no management fees
Cons
- Must be a U.S. citizen or resident to open an account
- Broker-assisted accounts have high trade fees
4. Best for Account Type Options: Merrill Edge
Enjoy the freedom to invest in a variety of investment types, including stocks, ETFs and options. You can choose between a self-directed account or a guided investment account. If you choose guided, you can use the robo-advisor or an actual advisor. Regardless of the account type you select, you’ll have access to retirement calculators and insights to help you in planning for retirement. Customer service is available 24/7.
Why Benzinga likes it: For those who want to be actively involved in their investments, Merrill Edge offers the tools and access to your account you need.
Pros
- No minimum required for self-directed accounts
- Bank of America integration for ease of managing all assets in one place
- In-person assistance at more than 2,000 Bank of America locations
Cons
- Fewer investment options compared to other leading accounts
- Guided accounts come with investing fees ranging from 0.45% to 0.85%
- Cash not held in investments earns low interest rates
5. Best for Hands-Off Investing: Betterment
Some people just want to place money in an account and know that it is the best investment option based on their needs. If that sounds like you, Betterment is a great option. When your account has less than $20,000 in it, you’ll pay a $4 per month fee. After that, it’s 0.25% annually until you reach $100,000, at which point you’ll pay an additional 0.15%. But with those fees comes access to certified financial planners. Automate your retirement strategy with the tools Betterment provides.
Why Benzinga likes it: The automated retirement investment strategy helps many people save for retirement without the headaches of checking on their accounts regularly or wondering whether they are saving in the right places.
Pros
- No account minimums
- Easy-to-navigate platform and supporting tools
- Connect external accounts to get a complete picture of your retirement savings
- Simple account setup
- Automated advice on increasing contribution amounts or investment strategies
Cons
- No self-directed account options
- Fees could consume some of your savings depending on how much you hold in the account
6. Best for Robo-Advisor Account: Wealthfront
Wealthfront is a leading robo-advisor. While the account does not offer access to a traditional advisor, you’ll have the tools you need to get started investing your assets yourself. Fill out a questionnaire to help inform your risk tolerance and begin trading funds in up to 12 asset classes. Get access to a variety of investment vehicles, including ETFs, real estate investment trusts (REITs) and stocks.
Why Benzinga likes it: The goal-tracking feature helps you see where you are with saving and whether you need to make adjustments to your contributions.
Pros
- Clear tracking to see whether you’re on track for retirement saving
- Automated account rebalancing
- Simple do-it-yourself investment options and features
Cons
- 0.25% annual fee
- $500 minimum deposit
- No option for an investor-guided account
How a Roth IRA works
A Roth IRA allows you to place after-tax dollars into a retirement account. You won’t enjoy any tax savings for that year, but you can grow your investment tax-free and withdraw the funds tax-free starting at age 59½ as long as the account has been open for five years.
These accounts are best for people who expect to be in a higher tax bracket during retirement. That way, you can pay your taxes on the funds now to maximize tax savings.
Passing your account to heirs also offers them tax-free withdrawals, which can be a nice perk when passing inheritance.
You will not be required to take distributions at a certain age, which means you can hold the funds and keep growing them tax-free until you need them.
If you need the funds before age 59½, you can use them toward a first-time home purchase, health insurance, higher education, medical expenses, disability claims, IRS tax levy payments and more.
How Do Roth IRAs Differ from Traditional IRAs?
The biggest difference between Roth IRA accounts and traditional IRAs is that Roth contributions are after-tax while traditional contributions are pretax. That means that Roth accounts are better for those who expect to be in a higher tax bracket in retirement while traditional accounts are better for those who believe they will be in a lower tax bracket in retirement.
With Roth, you’ll enjoy tax-free contributions. With a traditional IRA, you’ll get tax-deferred contributions. Both account types have a $7,000 contribution maximum for 2024 unless you are older than 50, in which case you can contribute $8,000.
Traditional accounts allow anyone with earned income to contribute. But Roth IRAs have limits. Once you start making a certain amount each year, your contribution maximums will decrease.
Another key difference to note is that Roth accounts have no mandatory distributions. In contrast, you’ll need to start taking distributions from a traditional account at age 73.
| Features | Roth IRA | Traditional IRA | 401(k) |
| Tax benefits | Tax-free growth and qualifying withdrawals | Tax-deferred growth and tax-deductible deposits | Employer-sponsored savings, save & invest pre-tax earnings |
| Age requirements | No requirement | Must be under 70.5 years old to contribute | 21 years old |
| Contribution limits | $5,500 for those under 50 years old, $6,500 for those 50+ | $5,500 for those under 50 years old, $6,500 for those 50+ | Employees can contribute up to $18,500 (not including employer match) |
| Income limits | Depends on marital status and adjusted gross income | No | No |
| Taxes on withdrawal | No | Yes | Yes |
| Taxes on deposits | Yes | No | No |
| Early withdrawal penalty | Yes, pay taxes on amount plus 10% penalty | Yes, in some cases a 10% penalty | Yes, pay a penalty |
| Required withdrawals | No | Yes, by age 70.5 | Yes, by age 70.5 |
How to Choose the Best Roth IRA Brokerage Account for You
As you search for the best Roth IRA, consider these factors that will determine the ideal account and provider for you:
- Account types: Find the best account type that matches your investment needs and preferences, such as self-guided, guided or robo-advisor.
- Additional features: Look to see what extra features are available from the account before signing up.
- Calculators: If you aren’t sure how much you’ll need for retirement, retirement calculators can help guide you.
- Account integration: When you have various retirement accounts, integrating them on one platform will give you a clearer picture of your savings.
- Fees: Depending on your account size, you can lose a great deal of your investments each year to fees.
- Account minimums: How much you contribute each year might vary and you might not have a ton to place in the account when opening it so be sure to review account minimums before getting started.
- Investment access: Some accounts give you more access to various types of investments than others so review those before getting started.
Maximizing Your Tax Advantages With a Roth IRA
The most influential reason to open a Roth IRA is to maximize your tax advantages. When you believe your tax bracket will be higher in retirement or you want greater flexibility for when you’ll take distributions from your account, go with a Roth IRA.
Frequently Asked Questions
What is the best for a Roth IRA?
The best Roth IRA is Charles Schwab because of its options and flexibility. Reddit users also recommend Fidelity and Vanguard.
What is the five-year rule for a Roth IRA?
You cannot withdraw from a Roth IRA until it has been open for at least five years, even if you’ve reached the 59½ age requirement. That’s known as the five-year rule.
About Rebekah Brately
Rebekah Brately is an investment writer passionate about helping people learn more about how to grow their wealth. She has more than 12 years of writing experience, focused on technology, travel, family and finance. Her work has been published in Benzinga, Hearst Bay Area, FreightWaves and Dallas Observer publications.