How To Open A Roth IRA 💸 (6 Easy Steps!) #Best Education Page #Online Earning

So what we're going to be talking about in this video

is how to open a Roth IRA.

So I'm assuming you already understand

the wonderful benefits of investing through a Roth IRA,

but if by chance you don't, I'm gonna go ahead

and put a card up in the corner there

to a video I did recently talking about

the easiest way to become a tax free millionaire

and that can be accomplished

through the use of a Roth IRA.

So if you aren't really sure why it is

you may want one of these accounts,

I would recommend watching that video

and it will give you a much better understanding.

So let's say you've learned about Roth IRAs,

you wanna jump on the bandwagon,

how do you go about opening a Roth IRA?

That's what we're going to outline in this video.

So number one, the first thing you have to consider

is whether or not you are actually eligible

to open up a Roth IRA in the first place.

And if you are not, you don't need to worry

because what you can do is something called a Backdoor Roth.

I'll do a video on this down the road at some point.

But essentially what you're doing

is opening a Traditional IRA

and doing something called The Roth IRA Conversion.

So it's a two-step process

instead of just a one-step process.

But the eligibility requirement for opening up

a Roth IRA for 2019 are as follows,

if you are a single filer, you have to make less than

$137,000 to open one and if you are married filing joint

at the end of the year you have to earn

less than $203,000 altogether in order

to open up a Roth IRA directly.

Otherwise, like we said you have to do

the Roth IRA Conversion route and do the Backdoor Roth.

So if you make less than this amount of money

then you are eligible for a Roth IRA

and you can move on to step number two.

The second step is to basically figure out

where are you going to open up this Roth IRA

because there are a number of different

financial institutions out there.

Two of my recommendations for this are as follows,

number one is going to be M1 Finance

if you're looking for a completely fee free place

to open up your Roth IRA which I don't know why

you wouldn't be if you're looking to save

as much money as possible and keep your money invested.

So if you wanna open a completely fee free Roth IRA

that's going to be M1 Finance.

And they offer a number of different investment options.

Number one you can invest in individual stocks

if you want to build your own portfolio.

Number two you can invest in expert crafted portfolios

and number three which is also interesting to me,

as they do offer TDFs or Target Date Retirement Funds

which are really good investments

for somebody who is a more hands-off investor

or looking for that just set it and forget it approach.

So in my opinion M1 Finance is the best

option out there for a fee free Roth IRA.

Now if you're looking for a little bit more

hand holding and you want a more managed approach

where somebody actually builds and allocates

this portfolio for you tailored to your specific needs

and objectives, my recommendation is going to be

the robo advisor known as Betterment.

They charge just a 0.25% annual asset management fee

and they're going to take care of the entire process

of building that portfolio for you.

You don't have to do just about anything

except for funding that account and maybe filling out

your tax paperwork at the end of the year.

So if you wanna open an account with either one of these,

the links are in the description below.

They are affiliate links, you don't have to

use them if you don't want to,

but I certainly do appreciate it because it helps me out.

Helps to support my channel and allows me

to make more videos just like this one.

Okay so once you figure out where you're going

to actually open up a Roth IRA,

step number three is to get together

the needed information to open up

any kind of brokerage account.

This typically includes your name,

your social security number for tax reasons, your address.

This will also include your contact information

including your email to open up an account,

date of birth, some form of identification

which you may actually have to take a photo of and send in,

your employment as well as

what industry you're involved with

because they wanna make sure that you are not involved

or affiliated with any brokerage accounts out there.

You also have to declare what your annual income is

as well as your net worth.

And then you also have to fill out

what your investment objective is and your risk tolerance.

These are all SCC requirements.

A lot of this stuff you just don't have to worry about.

But they're just looking to see

if you are affiliated with any brokerage accounts

and what your experience is as an investor coming into this.

So you're gonna wanna collect this information

and have this ready and at your disposal

before you decide to open up an investing account.

The fourth step to opening up a Roth IRA

is to basically open that account

and then decide what investments

you want to hold within that account.

And like I said, M1 Finance allows you

to invest in individual stocks.

You can invest in any ETFs that

trade on the major exchanges.

You can invest in the TDFs, the Target Date Retirement Funds

and you can also invest in numerous expert pies

all fee free which is honestly a great option

if you're looking to keep more of your hard earned money

within your investing account

and not be paying money in fees.

If you're looking for the more managed approach,

Betterment allows you to invest in a customized

ETF Portfolio tailored to your

specific investment goals and objectives.

And obviously there are other institutions out there

where you can open up a Roth IRA.

These are just my two top recommendations.

After doing many months of research

on all of these investing platforms out there.

So number five after you went ahead

and opened up an account, decided on what investments

you want to hold, at this point

you're going to go ahead and fund your Roth IRA.

Now this right here is the limit here

on how much you can fund the account with each year.

So for most people it is a $6000 limit

as far as funding that Roth IRA.

Assuming you are eligible in the first place.

However, if you are 50 and up,

you can take advantage of what's called

a catch up period where you can fund

an additional $1000 making it a $7000 per year limit

as far as what you can put into that Roth IRA.

And then after that, number six

the final step here is figuring out when you're going

to continue to fund your Roth IRA

because you can add money to this account every single year.

A lot of people are very unclear on this

as far as when you can actually add money to this account.

What the IRS says here is that you can fund this account

any time from January 1st up until April 15th

of the following year for it to fall

within that particular tax year.

So this is one of the quirks to the Roth IRA

is you actually have a 15-month window

where you can fund a Roth IRA and it will go

on the past year's contribution.

So I know that sounds kind of confusing

but I went ahead and made a helpful little explainer here.

So for the 2019 tax year, you could've started

on January 1, 2019 and funded that account

at any point and time up until April 15, 2020.

So basically you wanna make sure

you fund that Roth IRA account

well before that IRS tax season deadline

to fall within that year as far as your contributions go.

But it is kind of a weird quirk there

because you have a 15-month period

where you can fund that Roth IRA.

A lot of my friends just do it every year in January

to keep it simple and I personally like that approach

because it's just easier for me to remember.

In January you fund your Roth IRA

and you get on with the rest of your life.

But anyways guys,

that's gonna wrap up this video.

That is how you go about opening up a Roth IRA.

If you do decide that you want to learn more

about M1 Finance or Betterment,

I've included some resources down below as well as links

to sign up if you are interested in using them.

But that's all I've got for now.

I hope you guys enjoyed it

and I will see you in the next video.

#Best Education Page #Online Earning

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