Best Roth IRA Accounts for September 2024

Benzinga’s top picks for the best Roth IRA accounts to open this month include Playbook, Charles Schwab and Fidelity Investments.

A Roth Individual Retirement Account (IRA) is a valuable investment tool that provides several tax advantages for retirement savings, making it an attractive option for many individuals. Unlike a traditional IRA, where contributions are tax-deductible but withdrawals are taxed in retirement, a Roth IRA is funded with after-tax dollars, allowing account holders to enjoy tax-free withdrawals during retirement. This unique feature can significantly benefit long-term savers, especially those who anticipate being in a higher tax bracket in their later years. By opening a Roth IRA, individuals can strategically enhance their retirement savings, ultimately leading to a more secure financial future.

The best Roth IRA accounts have minimal or no account fees, offer excellent retirement planning tools and have reliable customer support. Benzinga reviewed some of the leading providers of the best Roth accounts for this month to help you get started.

Quick Look at the 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 offer investment options and guidance to help with retirement savings. Here’s a look at the leading options for the best place to open IRA account this month.

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 We Picked It: With its digital platform, low fees and diversified investment options, Playbook offers a convenient way to save toward retirement while lowering your taxes. Plus, you can get a guideline for what account type to place your money in for the best tax benefits and savings.

2. Best for Holistic Approach to Retirement Savings: Charles Schwab IRA

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 We Picked It: With Charles Schwab, your Roth IRA account comes with support like tax calculators and real-time market data. This can help you make more informed decisions about when to buy, sell or hold onto your investments. Plus, you'll have access to retirement specialists who are ready to help you with any questions or concerns you may have about your Roth IRA account. 

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 with Fidelity Roth IRA, you can open your account and fund it slowly as you have the money. The platform also offers flexibility in how you manage your account, including robo-advisor, self-directed or advisor-guided. If you have any questions, Fidelity Investments offers helpful articles and features to guide you in your retirement planning. Plus, their Intuitive and interactive chatbot can answer many basic questions fast and 24/7.

Why We Picked It: Fidelity Investments provides a user-friendly platform with account features and support tailored for beginners. The platform is also suitable for those looking to enhance their investment skills.

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, such as how much you’ll need for retirement. Customer service is available 24/7.

Merrill Edge has partnered with Bank of America to allow customers to manage all their financial assets in one place, providing a seamless experience for those with accounts at both institutions.

Why We Picked It: Merrill Edge offers tools and resources for hands-on investors to make informed decisions and effectively manage portfolios. It has a user-friendly interface, educational materials and diverse investment options for active investment participation.

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 We Picked It: Betterment Roth IRA offers a convenient and hassle-free way to save for retirement. By automating your investment strategy and leaving the heavy lifting to Betterment's algorithms, you can enjoy peace of mind knowing that your retirement savings are in good hands.

6. Best for Robo-Advisor Account: Wealthfront

Wealthfront is one of the leading robo-advisors in the industry. While the account does not offer access to a traditional advisor, Wealthfront provides 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 We Picked It: The goal-tracking feature helps you see where you are with saving and whether you need to make adjustments to your contributions.

How a Roth IRA Works

A Roth IRA allows you to place after-tax dollars into an individual 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.

Roth IRA 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?

Roth IRA accounts have after-tax contributions and are better for those expecting to be in a higher tax bracket in retirement, while traditional IRA accounts have pretax contributions and are better for those expecting to be in a lower tax bracket. Both have contribution limits, but Roth IRAs have income limits that can decrease contribution maximums. Additionally, Roth IRA accounts have no mandatory distributions, while traditional accounts require distributions starting at age 73.

Here's an overview of how Roth IRA differs from Traditional IRA and 401(k).

How Much Do You Need to Open a Roth IRA?

The good news is that you don't need a lot of money to open a Roth IRA. In fact, many financial institutions allow you to open a Roth IRA with as little as $50 or $100. This low initial investment requirement makes Roth IRAs accessible to a wide range of individuals, regardless of their income or financial situation.

However, just because you can open a Roth IRA with a small amount of money doesn't mean that's all you should contribute. The annual contribution limit for Roth IRAs is currently $7,000 for individuals under the age of 50, and $8,000 for individuals aged 50 and older. If you can afford to contribute the maximum amount each year, you'll be able to maximize the tax benefits and savings potential of your Roth IRA. Regular and consistent contributions are recommended for a Roth IRA to build a substantial retirement nest egg.

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