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How To Open A Roth IRA 馃捀 (6 Easy Steps!) - YouTube
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so what we're going to be talking about
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in this video is how to open a Roth IRA
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so I'm assuming you already understand
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the wonderful benefits of investing
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through a Roth IRA but if by chance you
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don't I'm going to go ahead and put a
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card up in the corner there to a video I
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did recently talking about the easiest
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way to become a tax-free millionaire and
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that can be accomplished through the use
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of a Roth IRA so if you aren't really
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sure why it is you may want one of these
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accounts I would recommend watching that
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video and it will give you a much better
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understanding so let's say you've
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learned about Roth IRAs you want to jump
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on the bandwagon how do you go about
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opening a Roth IRA that's what we're
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going to outline in this video so number
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one the first thing you have to consider
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is whether or not you are actually
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eligible to open up a Roth IRA in the
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first place and if you're not you don't
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need to worry because what you can do is
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something called a backdoor Roth I'll do
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a video on this you know down the road
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at some point but essentially what
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you're doing is opening a traditional
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IRA and doing something called the Roth
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IRA conversion so it's a two-step
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process instead of just a one-step
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process but the eligibility requirements
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for opening up a Roth IRA for 2019
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are as follows if you are a single filer
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you have to make less than one hundred
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thirty seven thousand dollars to open
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one and if you are married filing joint
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at the end of the year you have to earn
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less than two hundred three thousand
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dollars altogether in order to open up a
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Roth IRA directly otherwise like we said
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you have to do the Roth IRA conversion
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route and do the back door raw so if you
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make less than this amount of money then
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you are eligible for a Roth IRA and you
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can move on to step number two the
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second step is to basically figure out
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where are you going to open up this Roth
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IRA because there are a number of
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different financial institutions out
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there two of my recommendations for this
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are as follows number one is going to be
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M one finance if you're looking for a
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completely fee free place to open up
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your Roth IRA which I don't know why you
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wouldn't be if you're looking to save as
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much money as possible and keep your
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money invested so if you want to open a
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completely fee free Roth IRA that's
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going to be M one fine
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and they offer a number of different
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investment options number one you can
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invest in individual stocks if you want
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to build your own portfolio number two
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you can invest in expert crafted
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portfolios and number three which is
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also interesting to me as they do offer
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TDF or target-date retirement funds
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which are really good investments for
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somebody who's a more hands-off investor
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or looking for that just set it and
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forget it approach so in my opinion m1
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finance is the best option out there for
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a fee free Roth IRA now if you're
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looking for a little bit more
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hand-holding and you want a more managed
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approach where somebody actually builds
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and allocates this portfolio for you
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tailored to your specific needs and
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objectives my recommendation is going to
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be the Robo advisor known as betterment
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they charge just 0.25 percent annual
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asset management fee and they're going
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to take care of the entire process of
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building that portfolio for you you
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don't have to do just about anything
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except for funding that account and
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maybe filling out your tax paperwork at
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the end of the year so if you want to
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open an account with either one of these
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the links are in the description below
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they are affiliate links you don't have
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to use them if you don't want to but I
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certainly do appreciate it because it
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helps me out helps to support my channel
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and allows me to make more videos just
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like this one okay so once you figure
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out where you're going to actually open
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up a Roth IRA step number three is to
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get together the needed information to
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open up any kind of brokerage account
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and this typically includes your name
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your social security number for tax
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reasons your address this will also
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include your contact information
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including your email to open up an
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account
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date of birth some form of
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identification which you may actually
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have to take a photo of and send in your
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employment as well as you know what
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industry you're involved with because
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they want to make sure that you are not
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involved or affiliated with any
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brokerage accounts out there you also
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have to declare what your annual income
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is as well as your net worth and then
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you also have to fill out what your
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investment objective is and your risk
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tolerance these are all SEC requirements
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a lot of the stuff you just don't have
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to worry about but they're just looking
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to see you know
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if you are affiliated with any brokerage
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accounts and what your experience is as
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an investor coming into this so you're
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gonna want to collect this information
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and have this ready and at your disposal
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before you decide to open up an
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investing account the fourth step to
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opening up a Roth IRA is to basically
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open that account and then decide you
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know what investments you want to hold
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within that account and like I said you
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know m1 finance allows you to invest in
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individual stocks you can invest in any
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ETF that trade on the major exchanges
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you can invest in the TD FS the target
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date retirement funds and you can also
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invest in numerous expert PI's all be
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free which is honestly a great option if
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you're looking to keep more of your
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hard-earned money within your investing
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account and not be paying money in fees
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if you're looking for the more managed
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approach betterment allows you to invest
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in a customized ETF portfolio tailored
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to your specific investment goals and
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objectives and obviously you know there
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are other institutions out there where
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you can open up a Roth IRA these are
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just my two top recommendations after
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doing many months of research on all
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these investing platforms out there so
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number five after you went ahead and
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opened up an account decided on what
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investments you want to hold at this
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point you're going to go ahead and fund
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your Roth IRA now this right here is the
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limit here on how much you can fund the
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account with each year so for most
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people it is a six thousand dollar limit
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as far as funding that Roth IRA assuming
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you are eligible in the first place
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however if you are 50 and up you can
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take advantage of what's called a
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catch-up period where you can fund an
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additional $1,000 making it a seven
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thousand dollar per year limit as far as
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what you can put into that woth IRA and
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then after that number six the final
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step here is figuring out when you're
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going to continue to fund your Roth IRA
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because you can add money to this
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account every single year and a lot of
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people are very unclear on this as far
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as when you can actually add money to
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this account and what the IRS says here
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is that you can fund this account
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anytime from January 1st up until April
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15th of the following year for it to
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fall within that particular
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tax year so this is one of the quirks to
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the Roth IRA as you actually have a 15
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month window where you can fund a Roth
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IRA and it will go on the past year's
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contribution so I know that sounds kind
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of confusing but I went ahead and made a
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helpful little explainer here so for the
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2019 tax year you could have started on
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January 1st 2019 and funded that account
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at any point in time up until April 15th
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of 2020 so basically you want to make
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sure you fund that Roth IRA account well
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before that IRS tax season deadlines to
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fall within that year as far as your
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contributions go but it is kind of a
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weird quirk there because you have a 15
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month period where you can fund that
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Roth IRA a lot of my friends just do it
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every year in January to keep it simple
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and I personally like that approach
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because it's just easier for me to
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remember you know in January you fund
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your Roth IRA and you get on with the
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rest of your life but anyways guys
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that's gonna wrap up this video that is
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how you go about opening up April off
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IRA if you do decide that you want to
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learn more about m1 finance or
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betterment I've included some resources
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down below as well as links to sign up
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if you are interested in using them but
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that's all I've got for now I hope you
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guys enjoyed it and I will see you in
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the next video
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