6 Best Roth IRA Accounts of July 2024 (2024)

A Roth IRA is a tax-advantaged retirement account. When you open a Roth IRA and contribute money to it, the money in that account grows tax-free (assuming you follow all the rules). After you turn 59½, you can withdraw your money, including any investment gains, without owing any taxes. That’s a sweet and valuable perk once you’re in retirement.

Oh, by the way? If you’ve got many years until retirement, be sure to invest the money in your Roth IRA in a diversified portfolio of stocks and bonds. Here’s more on what an IRA is, how to open a Roth IRA, and how to invest for retirement.

The 2024 IRA contribution limit is $7,000 if you’re under age 50, and $8,000 for those 50 and older. The limit is set by the IRS and applies to the total annual amount of new money an investor is allowed to contribute to traditional and Roth IRAs at any broker. If you invest in both a traditional and a Roth IRA in the same year, the total of your combined contributions still may not exceed that $7,000/$8,000 limit. (IRA rollovers and IRA-to-Roth conversions aren’t subject to these contribution limits.) See “What is an IRA?” for more on IRA contribution and withdrawal rules for 2024.

The big advantage of a Roth IRA over a traditional IRA is that once you retire, all of your money, including your investment earnings, comes out tax-free. That’s a nice perk when you’re on a limited income in retirement and hoping to keep as much as your savings for yourself, rather than handing it over to the IRS.

Two other Roth IRA advantages:

• If you run into a money emergency, you can always withdraw your contributions at any time, no taxes or penalties (with a traditional IRA, early withdrawals generally come with income tax plus a 10% penalty).
• There are no required minimum distributions, so you can choose when to withdraw from your Roth, unlike a traditional IRA, from which you’re required to take distributions once you reach age 73.

But hold on. The traditional IRA has its own advantages: The money you put into a traditional IRA is pre-tax (if you qualify for deductible contributions). Put another way, your traditional IRA contributions reduce your taxable income in the year you make the contribution. That can help boost how much you save. (In retirement, you pay income tax on the money you withdraw from your IRA.)

Plus, your investments grow tax-deferred — no tax due till you withdraw the money — and if your tax rate is higher now than it will be in retirement, then avoiding tax on your contribution dollars now, with a traditional IRA, will lower your lifetime tax bill.

If you’re having trouble picking between a Roth IRA and a traditional IRA, you could always choose to contribute to both. Just remember that the annual maximum you can put in both accounts put together is $7,000 in 2024, or $8,000 if you’re 50+.

Read more about Roth IRAs vs. traditional IRAs, including contribution limits and eligibility rules.

Roth IRA contributions are not tax deductible. The money you contribute to a Roth is money that will be counted as part of your income in the year you make the contribution. That is, you earn your money for the year and report it, as usual, on your tax return. Meanwhile, you make your Roth IRA contribution(s), without any tax effect.

The beauty of a Roth is that, once you put your money in, and assuming you let it grow till you’re at least 59½ years old, then all of your money comes out entirely tax-free, including whatever investment returns you earned in the account. That’s pretty sweet.

You can withdraw your Roth IRA contributions any time you want, no penalty, no taxes. Say you contributed money to a Roth IRA yesterday? That money you contributed can be taken out of your account today, without taxes or penalty.

The sticky part is if you want to withdraw your investment earnings. That money will be subject to income taxes and a 10% early withdrawal penalty if you take it out before you’re age 59½. There are some exceptions to the penalty — check out the Roth IRA early withdrawal exceptions on IRS.gov.

Yes, you can have multiple Roth IRAs. Just know that the annual contribution maximum (which is $7,000 in 2024, plus an extra $1,000 if you’re 50 or older), applies to your contributions to all Roth accounts, totaled up. You can contribute that annual maximum spread out across one Roth or three or 100, but don’t exceed that dollar cap.

Keep in mind that the annual maximum dollar amount applies to money you’re contributing to a Roth IRA. If you’re rolling money into an IRA, or converting a traditional IRA to a Roth IRA, the annual maximum contribution amount doesn’t apply.

Yes, you absolutely can (dare I say, should?) have a Roth IRA and a 401(k). There’s no limitation on having both. You can contribute the maximum amount to a 401(k), aka $23,000 in 2024, plus an additional $7,500 if you’re 50+, and at the same time you can contribute the maximum to a Roth IRA, i.e., $7,000 in 2024, plus an extra $1,000 if you’re 50+.

Even if your 401(k) offers a Roth option, you can contribute the maximum 401(k) amount to that Roth option, and contribute the maximum to your Roth IRA.

Andrea Coombes, a senior writer for investor.com, has more than 20 years of experience researching, writing and teaching about personal finance, with a focus on retirement planning. She manages her own retirement portfolio (a couple of 401(k)s, a rollover IRA, Roth IRA, SEP IRA, HSA and brokerage account), with the bulk of her retirement assets focused on the Lazy Portfolio strategy for retirement investing. A former financial coach, she is studying for the Certified Financial Planner™ credential, one of the most stringent certifications for financial professionals.

Blain Reinkensmeyer, co-founder of investor.com and head of research at fellow site StockBrokers.com, has been investing and trading for over 25 years. After having placed over 2,000 trades in his late teens and early 20s, he became one of the first in digital media to review online brokerages. Blain created the original scoring rubrics for investor.com and oversees all testing and rating methodologies.

For this guide:

• We used our own brokerage accounts for testing.
• We collected multiple data points for each broker.
• We tested each online broker's website and mobile app, where applicable.
• We maintained strict editorial independence; brokers cannot pay for inclusion or a higher rating.

Our research team meticulously collected data on features with particular importance to those saving for retirement, such as trading costs, management fees, availability of fee-free funds, ease of website and app use, and retirement planning tools and resources. All research, writing and data collection at investor.com is done by humans, for humans. Read our generative AI policy here.

Investor.com uses a variety of computing devices to evaluate platforms and tools. Our reviews and data collection were conducted using the following devices: iPhone SE running iOS 17.5.1, MacBook Pro M1 with 8 GB RAM running the current MacOS, and a Dell Vostro 5402 laptop i5 with 8 GB RAM running Windows 11 Pro.

Each broker was evaluated and scored in seven key categories: retirement account types, IRA fees, self-directed investment options, managed investment options, retirement planning tools, rollover experience, and ease of use.

For this guide, we tested the following online brokers:

• Ally
• Charles Schwab
• E*TRADE
• Fidelity
• Interactive Brokers
• J.P. Morgan Self-Directed
• Merrill Edge
• Robinhood
• SoFi
• Vanguard