Finding your best Roth IRA—one that matches your investing objectives and has low fees—can be confusing.
If you’re a seasoned investor, your best Roth might be part of a diversified portfolio of both Roth and pre-tax (traditional) investments for retirement, which may include IRAs as well as company sponsored plans.
On the other hand, if you’re just starting out, that best Roth could be a single investment in your employer’s plan or Roth IRA. Even though there is no Roth IRA tax deduction, that single investment should be one of the most profitable you’ll ever make.
So, the best Roth for one investor may not be the best for another.
No matter what your individual situation, this website will help you incorporate your employer’s plan (if any) and IRA(s) into your investment plan for retirement. If you don’t have an investment plan, I’ll help you come up with a good one.
Before you get started, make sure a Roth investment is smartest for you. When it comes to making a traditional vs Roth IRA contribution, you need to consider your age, tax bracket, and income needs for the coming year. The best solution (the one that yields you the highest after-tax return) often is a combination of the two.
Then there are the Roth IRA distribution rules and IRS interpretations governing Roth IRAs. They can be complicated. Let me enlighten you on some advantageous interpretations of which you may not be aware:
A quick shout-out to venerable former Delaware congressman William V. Roth Jr., who championed the Roth IRA and subsequent Employer Roth option, two great savings vehicles for retirement.
I’ve found a lot of folks get confused as to whether or not they can take a Roth IRA early withdrawal tax and penalty free. It’s no wonder—the IRS ordering rules can be hard to fathom. A Roth IRA remains one of the few retirement accounts where money can be tapped penalty and tax free before age 59 1/2.
You can do a rollover 401k to Roth IRA if you want to after you separate from service from your old employer, or you can keep it where it’s at or do a rollover to your next employer’s plan. It’s completely up to you, and any of those three options shouldn’t cost you a dime in taxes or fees if you do it right.
If you’re hoping to pass money along to the next generation, your best Roth IRA shines like no other. No required minimum distributions allow you to not only actively invest your Roth until the day you die, but pass it along tax free to your Roth IRA beneficiary (or beneficiaries).
You have many choices when deciding where to invest Roth IRA contributions. Most financial institutions that offer investments are also authorized Roth IRA custodians or contract with one. That means banks, credit unions, brokerage houses, insurance companies, mutual fund companies, discount brokers, and more all offer Roth IRAs.
Most products that financial institutions offer are fair game for investment in your Roth IRA, but you must keep them “contained.” For example, you might have a traditional IRA account, a Roth IRA account, as well as a regular taxable account with the same financial institution: Your best Roth IRA can’t be commingled with those other accounts, or your tax free earnings advantage will be lost.
That means you can invest in individual securities like stocks and bonds, index or actively managed mutual funds, exchange traded funds, commodities like gold, silver, pork bellies, or cattle futures, even some derivatives and foreign currency trading are possible.
Then there are the self directed Roth IRAs where investing in real estate, private businesses, precious metals, and private loans may be possible.
Don’t be intimidated. Whatever your knowledge and skill level is as an investor, I’ll help you find your best Roth IRA and get the most out of all of the tax advantaged accounts available to you. This website is packed with up-to-date information for both the novice and seasoned investor.
Tax free earnings trump taxable earnings, especially if you expect to double, triple, or quintuple your money, and sure beats being “held hostage” by Uncle Sam. That’s one of the big advantages Roth investments have over pre-tax/traditional savings vehicles, and why I believe they should be in everyone’s investing lineup. Who knows what ordinary income tax rates are going to be when you finally take that money out of those traditional retirement savings vehicles?
Combine that best Roth IRA with other low fee, tax advantaged accounts and you’ve got one of the most effective retirement plans on the planet!
This Roth IRA page and associated links has a ton of information on Roth IRAs. If you haven't already, fully explore this site to find out more about private and employer-sponsored tax advantaged accounts.
Want more Roth? Best Roth! A Beginners Guide to Roth IRAs, Employer Roth Options, Conversions, and Withdrawals is one of the most comprehensive books on the subject. It contains a ton of up-to-date information not only on Roth accounts but investment risk strategies as well.