Everything You Need to Know to Open Your Roth IRA
Roth IRAs are a great tool to start saving for retirement, but you need to make sure that you invest your money in the right fund and know how to get started. Here we’ll talk about what you need to do before you even think about investing in a Roth, and how to get it started.
Be Secure Before You Start
- Pay off your debts before you begin to save
- Have a savings account with at least one month of income in it for emergencies
Before you start, you have to make sure your major debts are paid off and of course that you have money saved somewhere else that’s easier to get to. The last thing you want is to have an emergency that you can’t get help for because it can take a while to pull money out of your IRA. Savings accounts are there for a reason, make sure you use them!
Many banks that you already have accounts with have Roth IRAs available, but some people opt for using credit unions instead. Any decent investment company will be able to give you an IRA at a good rate, but you’ll want to ask them what services they offer like:
- Can you have contributions automatically applied from your checking account each payday?
- Are there minimum contributions or returns?
- What kind of reputation does the company have? Check up on them online to be sure your investment will be secure.
Automatic investments are the best way to go with any IRA; these allow you to start saving without thinking about it, but you’ll want to make sure that you budget these savings into your spending so you don’t accidentally go over!
Open Your Roth IRA
Once you’ve located a broker or institution to open your account with, you’re ready to get started! You’ll need a few pieces of information, but nothing special:
- The bank or credit union information that you’ll be moving your money from into the IRA
- Your employer information if you’re going to shift your 401(k) funds into your Roth IRA
- Your SSN and driver’s license number
If you’re opening your account online or at real world institution, you’ll still need all of these pieces of information (the ID will be especially necessary at a bank because of Patriot Act provisions, so be sure you bring it!) to open your account. After about half an hour, you’ll be all set up and ready to go! Roth IRAs are a secure and easy way to build your own safety net, so take advantage of it today!