where is the best place to open a Roth IRA after years of trying out lots and
lots of different brokerages I've narrowed it down to the five best places
to open a Roth IRA so rather than staying up until 2:00 a.m. trying to
research all your options watch this video for a rundown of the pros and cons
of the five best platforms hey everyone welcome back to my channel I'm Rhodes
and this channel is all about money and investing for beginners so if you're new
here feel free to subscribe and hit the notification bell for new videos like
this every week when you're trying to decide where to open your Roth IRA you
really can't go wrong with Vanguard although it's not my personal favorite I
have to mention it because Vanguard is the og of retirement investing
practically half of all Americans have their retirement portfolios at Vanguard
for good reason Vanguard is known for its super low-cost
target-date funds target-date funds are a special type of mutual funds that puts
your retirement investing on autopilot they gradually adjust your asset
allocation as you get closer to retirement age so once you do the
initial setup and you buy into the fund you don't have to do anything with it
literally until you retire so target date funds are a perfect option for lazy
investors outside of a target date fund you'd have to create your own portfolio
of stocks bonds and cash and adjust the asset allocations yourself over time
since as you get older you'd want to gradually move your money out of stocks
which are more volatile into more stable income producing investments like bonds
obviously this takes some skill so buying into a target date fund
completely eliminates the need for you to do that because the fund will do it
for you so if you like the idea of putting your retirement on autopilot
then you'd probably like target date funds in which case Vanguard would be a
great place to open your Roth IRA that being said Vanguard is also good
for buying individual stocks other kinds of ETFs and mutual funds and pretty much
anything you might want to invest in so like I said regardless of what you want
to invest in a Vanguard Roth IRA will allow you to do all of it with minimal
fees another good place to open a Roth IRA is fidelity I've used fidelity for a
really long time and it's my personal favorite
like Vanguard it's a full sir brokerage that offers everything anyone
could ever need as an investor whether you're a beginner or you're more
experienced when I first opened a Roth I was keeping it really simple and just
investing in low-cost index funds but over the years as I became more
knowledgeable I started doing more advanced strategies like buying
individual stocks trading options and even international stocks and no matter
what it is that I wanted to do fidelity offered it so if you're a beginner at
investing you'll probably start with something simple like index funds but if
you ever want to branch out and do more advanced things as you grow and learn as
an investor then the last thing you want to do is to have to move your IRA
elsewhere because your current brokerage doesn't offer those things that's just
the big headache so when you're deciding where to open your Roth IRA you want to
think about how you're going to grow as an investor and choose a platform that
will grow with you something else I like about fidelity is its low commissions
although Vanguard and fidelity are very similar in terms of the range of
products you can invest in and they're both great for index funds and
target-date funds fidelity actually offers lower commissions for a lot of
things for example Vanguard charges seven dollars per stock trade whereas
fidelity charges $4.95 that's a pretty big difference and fees and commissions
are really something you should consider before you open your Roth IRA anywhere
last but not least if you open a Roth IRA at fidelity you'll also get really
good customer service you don't have to go through endless automated telephone
menus and whatnot just to talk to a real person it's never taken me more than 30
seconds to get to a customer service representative at fidelity and they'll
hold your hand and walk you through step by step any question you have about your
account whether it's how to place your first trade or how to rollover your 401k
or how to do anything so in summary if fidelity and Vanguard are very
comparable however fidelity I think obviously I'm a
little bit more biased but I do think they offer lower fees for a lot of their
products the third place I recommend opening a Roth IRA is acorns I'm a huge
fan for two reasons I know a lot of people who have a hard time saving money
but through the acorns roundup feature they've been able to save hundreds of
dollars without even trying the app helps you come up with money to invest
by connecting your debit card and rounding
your purchases so that you can invest with your spare change so if you open
your Roth IRA acorns you'll probably be able to keep adding a good chunk to your
retirement savings just from the spare change round the feature the second
reason I like acorns is that of course it's great for beginners whereas
fidelity and Vanguard are brokerages acorns is a robo-advisor
that means that acorns will tell you what to invest in and do it all for you
for example when you open your Roth IRA at acorns one of the first questions
they'll ask you is which of their five portfolios you want to invest in you
don't have to choose which stocks to buy and you don't have to know what's going
on in the stock market right now all you have to do is pick which portfolio that
you want ranging from most conservative to most aggressive then once you've
picked your portfolio you can check out what's gonna be in it each portfolio is
professionally designed and backed by lots of data to optimize your returns
while reducing your risk so other than choosing one of these five
cookie-cutter portfolios there's really no other work required on your part to
set up your Roth IRA at acorns it just doesn't get any more streamlined than
that it coins makes it really easy for you to get the funds in your Roth IRA
invested in the market as soon as possible with zero knowledge where is
this fidelity or Vanguard there's gonna be a little bit more of a learning curve
if my 90 year old grandmother wanted to get a cell phone
I'd start her off with a flip phone not an iPhone an iPhone has too many
features and she would just get confused acorns is like the flip phone of
investing limited options but super simple to use for beginners so I think
if you're just starting out you're gonna like acorns a lot - is another investing
app and it's a little bit different from acorns but it's a great place for
beginners to open your Roth IRA like acorns stash has a roundup feature that
lets you invest with your spare change but what differentiates stash from
acorns is it's themed portfolios so they have investment options like clean and
green the collection of companies that are advancing things like clean energy
and solar and wind power they have stuff like do the right thing so basically
they do the right thing Fund is a collection of companies that stash has
gathered into an ETF companies that make positive impacts on society and
environments basically all of their are organized by theme so it's not
hidden under some obscure financial jargon technology that you're gonna have
to look up it's just stuff like robots sitting that's pretty much investing
companies that are really public or water the world they even have a fun
calls women who lead so that's gonna and seeing gender diversity women in
leadership positions this makes it really easy for you to build a portfolio
around your passions and your values without having to navigate through a
bunch of obscure financial jargon and technical information so if you like
that and that's how you want to invest in your Roth IRA you might want to look
into stash another cool thing about stash is that you can also buy
fractional shares of individual stocks and ETFs which you can't do with acorns
so between the two stash offers a lot more features and possibilities for
customization for your personal preferences then acorns does next is
betterment betterment is another investing app similar to stash and
acorns in that it is a Robo advisor I would say betterment is not as simple
and easy to use as acorns or stash but it offers better advice and a wider
range of account options in addition to Roth IRAs Fetterman also offers a lot of
other account types such as traditional IRAs SEP IRAs joint accounts trust
accounts 401k rollovers as well as fully taxable non retirement investment
accounts betterment also offers an awesome savings account called the smart
saver account this pays over two percent that's obviously better than the rate
you'd get up pretty much any bank right now so with that arm in you can keep
your savings and your investments in one place which is always nice because
that's one less username and password that you have to keep track of the
reality is you're probably gonna need more than a Roth IRA you're gonna need
an emergency fund in an investment account to save up for a down payment on
a house in a few years or just to save up for your dream vacation
everyone needs multiple accounts for various purposes so rather than having
all your accounts at all these different places you can basically have all of
those in one place at Vetter mint because of the wide range of account
options it offers you can even give your accounts a custom name to really remind
you what your invest torez and keep you motivated so if you
like the idea of goals based investing and having all your financial stuff in
one place then definitely consider opening your Roth IRA at betterment so
in summary if you're a total beginner and you just need a really simple dumbed
down approach then go with a Roth IRA at acorns now if you want something as easy
to use as acorns but you're looking for something a little more robust and
you're working towards several financial goals at once and you like the idea of
having all your accounts in one place then I recommend going with betterment
if you like the idea of investing in themed portfolios and being able to buy
fractional shares of individual stocks and investing according to your passions
and values then go with a Roth IRA at stash and finally if you want to open a
Roth IRA on a platform that can do it all whether it's international stocks
bonds options and has amazing customer service then I recommend going with
fidelity or Vanguard although they're a little bit harder to navigate for the
beginner if you can get over the learning curve and you feel confident
enough to research your own investments then you'll definitely appreciate a more
advanced option like fidelity or Vanguard so hopefully by now you have a
pretty good idea where to open your Roth IRA I've covered a lot here but the most
important thing is to get started just pick a platform open your Roth IRA do
your research and start investing the choice of where you open your Roth IRA
isn't going to make or break your financial future for more beginner
friendly videos about investing make sure you also check out these two videos
right here and if you're new to the channel hit that subscribe button below
for new videos every week always remember to go after your dreams
unapologetically and to live life on your terms Cheers