Invest in Your Future: Discover the Top 10 Places to Open a Roth IRA in 2022
When it comes to saving for retirement, a Roth IRA is an excellent choice. Not only do you get to invest your money and watch it grow tax-free, but you can also withdraw your earnings without paying taxes in retirement. However, choosing the right place to open a Roth IRA can be a daunting task. That’s why we’ve compiled a list of the top 10 best places to open a Roth IRA in 2022. In this article, we’ll give you an overview of each option and share data on their performance and customer satisfaction in 2022.
Section 1: Vanguard
Vanguard is one of the most respected investment companies in the industry, with over $7 trillion in assets under management. The company is known for its low-cost index funds, which have helped millions of investors build wealth over the years. Vanguard’s Roth IRA options are no exception, with a wide variety of investment choices and low fees.
Vanguard offers two types of Roth IRAs: the Vanguard Brokerage Roth IRA and the Vanguard Roth IRA. The Vanguard Brokerage Roth IRA allows investors to buy and sell individual stocks, bonds, and ETFs. The Vanguard Roth IRA, on the other hand, invests in Vanguard mutual funds.
The fees for both types of Vanguard Roth IRAs are some of the lowest in the industry. There are no account fees, and the expense ratios for Vanguard’s mutual funds and ETFs are among the lowest available.
In terms of performance and customer satisfaction, Vanguard continues to impress. In 2022, Vanguard received numerous awards and recognitions from industry experts, including “Best Online Broker” from Kiplinger’s Personal Finance, “Best Overall Fund Company” from Morningstar, and “Top-Ranked Customer Service” from Investor’s Business Daily.
Section 2: Fidelity
Fidelity is another well-established investment company with a long history in the industry. Founded in 1946, Fidelity has grown to become one of the largest investment firms in the world, with over $10 trillion in assets under management.
Fidelity offers a variety of Roth IRA options, including the Fidelity Roth IRA, the Fidelity Roth IRA for Kids, and the Fidelity Spousal Roth IRA. The company also offers a wide range of investment choices, including mutual funds, ETFs, and individual stocks and bonds.
The fees for Fidelity’s Roth IRAs are also very competitive. There are no account fees, and the expense ratios for Fidelity’s mutual funds and ETFs are some of the lowest in the industry.
In terms of performance and customer satisfaction, Fidelity has received numerous awards and recognitions in 2022. The company was named “Best Broker for ETFs” by Investor’s Business Daily, “Best Online Broker” by Barron’s, and “Best Overall Online Broker” by StockBrokers.com.
Read More: How to Rollover Your 401(k) to a Roth IRA
Section 3: Charles Schwab
Charles Schwab is a well-known investment firm that offers a variety of financial services, including banking, retirement planning, and investment management. The company has been around for over 50 years and has over $7 trillion in assets under management.
Charles Schwab’s Roth IRA options include the Schwab Roth IRA and the Schwab Roth IRA for Kids. The company also offers a wide range of investment choices, including mutual funds, ETFs, and individual stocks and bonds.
The fees for Charles Schwab’s Roth IRAs are also very competitive. There are no account fees, and the expense ratios for the company’s mutual funds and ETFs are among the lowest in the industry.
In terms of performance and customer satisfaction, Charles Schwab continues to impress. In 2022, the company received numerous awards and recognitions, including “Best Overall Broker” from StockBrokers.com, “Best Online Broker” from Investor’s Business Daily, and “Best in Class for Customer Service” from Kiplinger’s Personal Finance.
Read More: Should You Rollover Your Pension to IRA?
Section 4: TD Ameritrade
TD Ameritrade is a well-known investment brokerage that has been providing investment services for over 45 years. The company is recognized for its wide range of investment options and resources, including its Roth IRA offerings. TD Ameritrade offers Roth IRAs with no minimum investment requirement and no annual account fees, making it an attractive option for those who are just starting to invest.
TD Ameritrade offers a variety of investment options for its Roth IRAs, including stocks, bonds, mutual funds, and ETFs. The company’s Roth IRA also offers a range of tax benefits, including tax-free earnings growth and tax-free withdrawals in retirement.
When it comes to fees, TD Ameritrade charges $0 for account opening, account maintenance, and inactivity fees. However, the broker charges $6.95 per trade for online equity trades.
Data from 2022 shows that TD Ameritrade continues to perform well in terms of customer satisfaction. According to J.D. Power’s 2022 U.S. Self-Directed Investor Satisfaction Study, TD Ameritrade ranks second in overall customer satisfaction among self-directed investors.
Section 5: E-Trade
E-Trade is a well-established online broker that offers a range of investment options, including Roth IRAs. E-Trade offers two types of Roth IRA accounts: the E-Trade Roth IRA and the E-Trade Roth IRA for Kids. The latter is a unique option that allows parents to open a Roth IRA for their child and contribute up to $6,000 per year.
E-Trade’s Roth IRAs offer a variety of investment options, including stocks, bonds, mutual funds, and ETFs. The broker also offers a range of tools and resources to help investors make informed investment decisions.
In terms of fees, E-Trade charges no account opening or maintenance fees for its Roth IRAs. However, the broker charges $0 commission for online U.S. listed stock, ETF, and options trades, but options contracts are subject to a $0.65 fee per contract. Additionally, E-Trade charges a $25 fee for outgoing account transfers.
E-Trade has been recognized for its customer service and investment offerings. In 2022, E-Trade was ranked first in J.D. Power’s U.S. Self-Directed Investor Satisfaction Study, beating out other well-known online brokers. The study measures customer satisfaction based on factors such as investment performance, account information, and customer service.
Section 6: Ally Invest
When it comes to the best places to open a Roth IRA, Ally Invest is definitely worth considering. As an online-only investment platform, Ally Invest offers low fees and a user-friendly interface that makes it easy for beginners to get started with investing.
Ally Invest offers a range of Roth IRA options, including self-directed accounts and managed portfolios. Their self-directed accounts have no annual fees and a $0 account minimum, which makes them a great choice for those just starting out. They also offer commission-free trading on stocks, ETFs, and options, which can save investors a lot of money over time.
In terms of customer satisfaction, Ally Invest has received high marks from users. In fact, in J.D. Power’s 2022 U.S. Self-Directed Investor Satisfaction Study, Ally Invest ranked second overall, just behind Charles Schwab.
Section 7: Betterment
Betterment is a robo-advisor that has gained popularity in recent years for its user-friendly platform and low fees. Betterment offers a range of investment options, including Roth IRAs, and they use a combination of technology and human advisors to help users make smart investment decisions.
Betterment’s Roth IRA accounts have no account minimums and a low annual fee of 0.25%. They also offer automatic rebalancing and tax-loss harvesting, which can help investors save money on taxes over time.
In terms of customer satisfaction, Betterment has received high marks from users. In fact, in J.D. Power’s 2022 U.S. Self-Directed Investor Satisfaction Study, Betterment ranked third overall, just behind Ally Invest.
Section 8: Wealthfront
Wealthfront is another robo-advisor that has gained popularity in recent years. They offer a range of investment options, including Roth IRAs, and use a combination of technology and human advisors to help users make smart investment decisions.
Wealthfront’s Roth IRA accounts have no account minimums and a low annual fee of 0.25%. They also offer tax-loss harvesting, which can help investors save money on taxes over time.
In terms of customer satisfaction, Wealthfront has received high marks from users. In fact, in J.D. Power’s 2022 U.S. Self-Directed Investor Satisfaction Study, Wealthfront ranked fourth overall, just behind Betterment.
Section 9: Robinhood
Robinhood is a popular investment platform that offers commission-free trading on stocks, ETFs, and options. They also offer Roth IRA accounts, which have no annual fees and no account minimums.
However, it’s worth noting that Robinhood has received some negative press in recent years due to their controversial decision to restrict trading during the GameStop frenzy in early 2021 temporarily. While this may not be a dealbreaker for everyone, it’s something to keep in mind when considering Robinhood as a Roth IRA provider.
In terms of customer satisfaction, Robinhood has received mixed reviews. In J.D. Power’s 2022 U.S. Self-Directed Investor Satisfaction Study, Robinhood ranked ninth overall out of ten providers.
Section 10: Acorns
Acorns is a popular investment platform that has gained popularity among millennials due to its unique investment philosophy. Unlike other platforms that require users to deposit large sums of money, Acorns allows users to invest small amounts of money and automatically rounds up their purchases to the nearest dollar. This is a great feature for those who are just starting their investment journey and don’t have a lot of money to invest.
Acorns offers three types of accounts, including a Roth IRA. The Roth IRA account has no account minimum, and the management fee is $3 per month for accounts with a balance under $1 million. For accounts with a balance over $1 million, the management fee is 0.25% per year.
In terms of performance, Acorns has had a solid track record in the past. However, in 2022, Acorns faced some challenges due to market volatility. The performance of the platform was not as strong as some of the other providers on this list.
Customer satisfaction is a top priority for Acorns, and the platform has received positive reviews in this regard. Users appreciate the simplicity and ease of use of the platform, as well as the ability to start investing with small amounts of money.
Investing for Success: Our Top Picks for Roth IRA Providers in 2023
Roth IRA is an excellent investment vehicle for anyone looking to save for retirement. Choosing the right provider is crucial, as it can have a significant impact on your investment returns and overall satisfaction with the platform. In this article, we have provided you with the top 10 best places to open a Roth IRA in 2022.
Whether you’re looking for a low-cost option like Vanguard or Fidelity, a user-friendly platform like Betterment or Wealthfront, or a unique investment philosophy like Acorns, there is a provider on this list that will suit your needs.
Remember to consider factors such as fees, investment options, customer service, and performance when selecting a provider. And most importantly, don’t hesitate to research and compare your options before making a decision. With the right provider and investment strategy, you can achieve your retirement goals and secure your financial future.
Frequently Asked Questions
A Roth IRA is a type of individual retirement account (IRA) that allows you to contribute after-tax dollars and withdraw tax-free in retirement. In contrast, a traditional IRA allows you to contribute pre-tax dollars, but you’ll pay taxes on withdrawals in retirement.
Anyone who has earned income and falls below certain income limits can open and contribute to a Roth IRA. For 2022, the income limits for single filers are $140,000, and for married filers filing jointly, the income limits are $208,000.
For 2022, you can contribute up to $6,000 to a Roth IRA or $7,000 if you’re age 50 or older.
Yes, you’ll generally face a 10% early withdrawal penalty if you withdraw earnings from your Roth IRA before age 59 1/2. However, there are some exceptions, such as using the funds for a first-time home purchase or qualified education expenses.
Yes, you can contribute to both a Roth IRA and a 401(k) or other retirement accounts as long as you meet the eligibility requirements for each account.
Yes, you can open a Roth IRA for a minor child or grandchild who has earned income up to the annual contribution limit.
Yes, you can convert a traditional IRA to a Roth IRA, but you’ll owe taxes on the converted amount in the year of the conversion.
The investment options available within a Roth IRA vary depending on the provider you choose. Some common options include stocks, bonds, mutual funds, and exchange-traded funds (ETFs).
Your Roth IRA will typically pass to your designated beneficiary or beneficiaries, who can continue to make tax-free withdrawals or roll the funds into their own Roth IRA.
Some benefits of opening a Roth IRA include tax-free withdrawals in retirement, no required minimum distributions, and the flexibility to withdraw contributions at any time without penalty. Additionally, a Roth IRA can be a valuable tool for estate planning and leaving a tax-free inheritance to your beneficiaries.