Open a Roth IRA

Choose the right brokerage, open the account, fund it, invest in a sensible portfolio, and set up automation — in under two hours.

Pick a Brokerage

• Open at Fidelity, Schwab, or Vanguard — all three are low-cost, reputable, and have no account minimums for Roth IRAs
• Fidelity and Schwab have better mobile apps and phone support than Vanguard — a practical consideration for new investors
• Avoid brokerages that charge account maintenance fees or trade commissions for basic ETFs — these eat into long-term returns

Open the Account

• Go to fidelity.com, schwab.com, or vanguard.com and click 'Open an Account' — select Roth IRA from the account type list
• Verify you're eligible: earned income in the current year and income below the IRS phase-out limit ($146,000 single / $230,000 married filing jointly in 2024)
• The contribution limit is $7,000/year in 2024 ($8,000 if age 50+) — you can contribute to a prior year's Roth IRA until Tax Day (usually April 15)

Fund the Account

• Link your checking account via ACH transfer — it takes 1–3 business days for funds to arrive and become available to invest
• Make the contribution as soon as possible — time in the market beats timing the market; a $7,000 contribution on January 1 vs April 15 makes a measurable long-term difference

Invest the Money

• A target-date fund is the simplest and best default investment — buy Fidelity Freedom Index 20XX, Schwab Target Date Index, or Vanguard Target Retirement 20XX where 20XX is your approximate retirement year
• For a 3-fund portfolio: buy a US total market index fund (e.g., FSKAX at Fidelity), an international index fund (FTIHX), and a bond index fund (FXNAX) — allocate bonds roughly equal to your age as a percentage
• Avoid individual stocks in your Roth IRA unless you're an experienced investor — the tax-free growth is too valuable to risk on stock picking

Automate

• Set up a monthly automatic contribution: link your checking account and schedule a recurring transfer of $583/month to hit the $7,000 annual limit
• Enable automatic investment (dividend reinvestment) on your chosen fund so contributions and dividends purchase additional shares immediately
• Set a calendar reminder each January to verify the IRS contribution limit — it increases periodically and you'll want to maximize it