Best Roth IRA
You may be wondering which is the best
Roth IRA account to open if you have decided that this form of retirement savings plan is right for you. At first glance it may seem that Roth IRA accounts are all the same. But while it is true to say that the accounts offer much the same in terms of investment and likely returns, and of course they all offer the same tax benefits, there are nonetheless important differences to be aware of.
Generally these important differences do not so much fall within the bounds of the account itself so much as the provider, bank, financial institute or broker. It is for this reason that when you are considering opening a Roth IRA account it is well worth doing a little thinking and a bit of research before committing yourself, and your money, to the first Roth IRA account you see.
Many people have previously assumed that all Roth IRA accounts are handled the same way, and have then found better options elsewhere, only to find that they face stiff and expensive penalties for trying to transfer their money or their account to another provider. Making sure you choose the best Roth IRA account for your needs and circumstances right from the very beginning will save a good deal of time and trouble, not to mention expense, later on.
The three main areas which you will need to consider carefully are any account fees that may be imposed, possible commission costs which could be incurred, and any restrictions there might be on the account such as initial starting limits. There is also the fourth possibility to consider, and that is whether you are considering a self directed Roth IRA, in which case there will be other more specific issues that will need to be considered, but we'll look at this area in a later article.
Clearly it will be important for you to make sure that the service you receive with your Roth IRA account is good. You'll quite probably be tied in to the provider or broker for a very long time, and it will be important to make sure that the service you receive is of an excellent standard. However, it is as well to be aware that sometimes good service does come at a small premium, and there are brokers and financial institutes who can manage your Roth IRA, but who charge a small fee for their work.
This isn't unusual, and although plenty of people opt for free alternatives, it would not be advisable to dismiss out of hand anyone who charges for the service. Consider what you are looking for, and whether the fees and charges are both reasonable and justified. There isn't room within the space of this article to examine every possible provider, charge and option, but we will cover those aspects which could be charged, and give you advice to consider when reviewing possible brokers or banks.
As far as fees are concerned, these vary both in terms of price and what they cover. For example, some charge a fixed fee per year, with others charging a fee per year only for those Roth IRAs which have a balance under a certain, specified amount. For example, the Bank of America Roth IRA charges a $30 fee for those accounts which have a balance under $10,000, although there is no minimum balance required.
On the other hand there is the Vanguard Roth IRA which charges a $10 fee on accounts under $5,000, but has a restriction that means you can only open a Roth IRA account with a minimum balance of $3,000. Minimum balance restrictions can be an issue for some people, and if you either don't have the money up front, or don't wish to commit such a large sum of money at this stage, then you may well be looking for those Roth IRA account providers who accept either a low minimum, or no minimum balance at all, such as the Bank of America.
Generally if you do have a larger sum of money to invest in your Roth IRA straight away then you will be able to choose from some of the premier providers, and obtain a higher level of service, lower fees, better commission options and other related or peripheral benefits besides. Don't assume that your own bank or financial institute will automatically be the best, but in some cases banks will charge fees unless you are already banking with them.
If you're looking for the best Roth IRA for you to direct yourself, choosing the investments and direction you'd like it to go in, then you will need to look into the best trader. Generally this would be a fee only trader rather than one who works on a commission basis, as you'll know you'll be getting independent advice that will ensure your money is in the best place for you. If you're looking at the idea of a Roth IRA rollover option, then you really will need straight, independent advice. Roller IRA options can involve fairly large sums of money and huge decisions. Back to "Roth IRA vs. Traditional IRA".