Learn how to start a Roth IRA in this step-by-step guide.
Table of Contents
Edited June 14, 2025
Starting a Roth IRA isn’t difficult. Any number of providers are more than happy to make this process easy for you. This page covers all aspects of how to start a Roth IRA: both the thought process you should go through and the practical steps you need to take.
Outline of how to start a Roth IRA
To start a Roth IRA you need to take the following steps:
- Confirm that you’re eligible for a Roth IRA.
- Determine that a Roth IRA is your best choice.
- Decide what type of investment is most appropriate for your Roth IRA.
- Select a provider for your Roth IRA.
- Establish the IRA.
Eligibility
Checking eligibility for this type of account is a key part of how to start a Roth IRA. It’s your responsibility — not the IRA provider’s — to determine that you’re eligible. There’s no point in starting a Roth IRA if you’ll merely have to undo the process later.
Contributions. Most people who have earned income (or a spouse with earned income), and whose overall income is below applicable limits, are eligible to start a Roth IRA with regular contributions. See our guidance in Basic Rules for Regular Contributions or, for all the gory details, IRS Publication 590-A.
Conversions. You can also use a conversion to start a Roth IRA. To determine whether you can make a conversion to a Roth IRA, visit Conversion Eligibility.
Choosing the Roth IRA
This site provides extensive guidance on choosing between the Roth IRA and other investment vehicles. If you’re unsure about this choice, at a minimum you should read the following pages:
If you want more details you can read other pages in the To Roth or Not to Roth section of this guide.
Type of investment
The best type of investment for your Roth IRA depends on various factors:
- The size of your Roth IRA
- The time frame for your investment
- Your other investments
- Your investing style
Size of your Roth IRA. The tax law doesn’t set a minimum size for a Roth IRA, but many providers set minimum account sizes. If one provider won’t accept your account because it’s too small, try another. In any event, if you’re starting small, it makes sense to choose a simple investment that won’t incur a lot of fees or require a lot of attention. You can get fancy after you’ve built your IRA to a larger size.
Time frame. When investing for the long term, it makes sense to take some risk to obtain higher rewards. If the risk produces losses, you’ll have plenty of time to recover. Short term investors need to put more emphasis on asset protection.
Your other investments. If you have other savings, such as a brokerage account or a 401k account, consider whether your IRA can be invested in a way that provides more balance to your overall portfolio. Another consideration is the allocation of assets between taxable accounts and non-taxable accounts. For example, some advisors suggest keeping assets that produce mostly ordinary income (like interest or dividends that don’t qualify for favorable rates) in an IRA or other non-taxable account, and investing your taxable accounts in assets that produce long-term capital gain or qualifying dividends.
Your investing style. Choose an investment you’re comfortable with. Some investors are willing to risk losses in order to have a shot at higher gains. Others are willing to accept a lower return to get a greater feeling of security.
Investing style affects your choice in another way. Some types of investments do quite well if you ignore them for extended periods. Others need frequent attention. How much time and effort do you want to put into your IRA investments?
Select a provider
Many types of financial firms offer Roth IRAs.
Mutual fund companies and brokerage firms. We used to treat these as two separate categories. Now it’s common to find mutual fund companies that offer brokerage services, and brokerage firms that make it possible to buy and sell shares in mutual funds. In either case, you’ll have a wide variety of investments to choose from.
Banks. For this purpose, “banks” include trust companies, savings and loans, and credit unions as well as commercial banks. They often accept relatively small accounts and may charge minimal fees or no fee at all, making them an attractive choice for people who want to start out small. But they’ll gladly accept larger accounts! A bank isn’t likely to offer as many investment alternatives as a mutual fund company or brokerage firm, however.
Insurance companies. Insurance companies provide IRAs, too. This choice may be appealing if you want to invest your IRA in an annuity or you find some other investment offering of the insurance company attractive. Be sure to obtain unbiased advice before buying an annuity — in other words, advice from someone other than an agent or advisor who will earn a commission on the sale.
Ask about fees. An essential part of how to start a Roth IRA is to determine what fees will apply to your account. There may be startup fees, annual maintenance fees, fees for changing your investments or withdrawing your money. These fees can have a significant impact on the investment performance of your IRA. It’s especially important to know what would be involved if you decide you want to transfer your account to another provider.
Establish your IRA
Nearly all firms that offer IRAs allow you to establish a new account online, though you can also do this in person at the firm’s office. Either way, you’ll have to provide some essential information such as your Social Security number, make an initial payment, and designate how that payment is to be invested. There are a few points to keep in mind when you establish your account.
Beneficiaries. You’re permitted to determine who receives your IRA at your death. Chances are the form presented to you by the IRA provider will say it goes to your spouse, if you have a living spouse at your death, and otherwise goes to your estate. This isn’t necessarily the best choice. If you’re putting a substantial amount into your IRA, it may make sense to consult an estate planning professional. And don’t forget you can name a contingent beneficiary in case the first beneficiary dies before you do.
Record keeping. Finally there’s the little matter of record keeping. Make sure you have a safe place for all records pertaining to your IRA, where you’ll be able to get at them when it’s time to fill out your income tax return or make a change in your investments. You aren’t required to report regular contributions to a Roth IRA, however, unless you also took distributions from your Roth IRA.