How To Open a Roth IRA – Checking Qualification

Wondering how to open a Roth IRA? The process is easy , once you have determined your eligibility and made the important choice of custodian. While there is no age limit on opening a Roth, there are income level requirements . For a single individual , that is $120,000 annually in income. Contributions to the Roth top out at $5000 per year, with the catch-up exception for individuals 50 years old or more , who are allowed an extra annual $1000 contribution. One benefit of the Roth IRA is that you can continue contributing to the account indefinitely, as opposed to traditional IRAs that require contributions to cease and require distribution to begin at age 70 ½. Your selection of custodian is very important. The custodian holds and manages the IRA for the owner, and there are a number of potential custodians you can choose among . Banks can hold the account, but may not have available the investment options and continuing education the investor needs . Brokerage houses normally specialize in a package of stocks and mutual funds as investment vehicles. Self Directed IRA custodians offer traditional investments including stocks, bonds and mutual funds, and some non-traditional opportunities including precious metals and real estate. Research all the variables to determine which custodian most comfortably compliments your investment style, and which will provide the most reliable service. All custodians charge fees for their services, so familiarize yourself with the chosen custodian’s fee schedule. Once you’ve done your homework establishing your eligibility and decided on the custodian, the biggest challenges on how to open a Roth IRA are behind you. The new custodian provides you with forms to fill out and return. Your paperwork is processed and you will be given an account number, and are ready to fund your Roth IRA, either by check or by electronic deposit. You then inform the custodian on your investment choices. The road to retirement just got smoother now that you know how to open a Roth IRA.

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