How to Open Your First Roth IRA

If you have a paycheck, even a small or part-time one, you can probably open a Roth IRA. It's one of the most common first retirement accounts, and it's often a good fit when you're early in your working years.

Most people put it off because retirement feels far away and the rules sound complicated. The basics are fairly simple, and opening the account usually takes less than half an hour online.

This guide covers what a Roth IRA is, who can open one, where to open it, what to invest in once the money is there, and what to know about taking money out.

What a Roth IRA is

An IRA is an individual retirement account. It's an account you open yourself, separate from any plan through your job.

With a Roth IRA, you put in money you've already paid income tax on. In exchange, the money can grow without being taxed along the way, and withdrawals in retirement are generally tax-free if you follow the rules.

The Roth IRA is just the account. To actually grow, the money inside it needs to be invested, usually in funds. We'll get to that below.

Who can contribute

You need earned income, which means money you were paid for work. A salary, hourly pay, freelance work, tutoring, or babysitting income you report on your taxes can all count. Gifts, allowance, and most investment income don't.

You can't contribute more than you earned that year. If you earned $3,000 from a part-time job, $3,000 is your cap.

If you're married and one spouse earns little or nothing, the working spouse's income can generally be used to fund an IRA for both of you, as long as you file taxes jointly.

There are also income limits. For 2026, according to the IRS, the amount you can contribute starts to shrink once your modified adjusted gross income reaches $153,000 if you're single, or $242,000 if you're married and filing jointly. Most people early in their careers are well under those numbers.

How much you can put in

For 2026, the limit is $7,500 per person across all of your IRAs, or your earned income for the year if that's lower. The limit usually changes every year or two, so check the IRS contribution limits page before you plan around a specific number.

You don't have to put in the full amount. Any amount you can contribute regularly is a good start. If you'd like to reach the limit, it works out to $625 a month.

You generally have until the tax filing deadline, usually around April 15, to make contributions for the previous year.

Should you start here or with a 401(k)?

If your job offers a 401(k) or similar plan with an employer match, it usually makes sense to contribute enough to get the full match first. A match is extra money your employer adds when you contribute, and it's hard to beat.

After that, a Roth IRA is a common next step. If your job doesn't offer a retirement plan, or you work for yourself, it's often the simplest place to begin.

Many people choose a Roth over a traditional IRA early in their careers because they expect to be in a higher tax bracket later. With a Roth, you pay the tax now, while your income and tax rate may be lower. If you're not sure which fits your situation, a tax preparer can help you compare.

Where to open a Roth IRA

Most people open one at a brokerage, which is a company that lets you buy and hold investments. Large brokerages such as Fidelity, Charles Schwab, and Vanguard all offer them. Some banks and investing apps do too.

When you compare, look at:

• Account fees. Many brokerages don't charge a fee just to have an IRA, but check.
• Minimums to open the account or buy a fund.
• Whether low-cost index funds or target-date funds are available.
• How easy the website or app is for you to use.

For most people, any large, well-known brokerage with no account fee and a good selection of low-cost funds will work. You don't need to find the perfect one.

How to open the account

The application usually takes 15 to 20 minutes online. Have these ready:

• Your Social Security number
• A government ID
• Your employer's name and address, if you have one
• Your bank account and routing number, to transfer money in

You'll also be asked to name a beneficiary, the person who would receive the account if something happened to you. You can change it later.

Invest the money after you deposit it

This is the step people most often miss. At many brokerages, money you transfer into your Roth IRA sits in cash until you choose an investment. If you never pick one, it may earn very little for years.

After your first deposit, log in and buy a fund. Two simple options for beginners:

• A target-date fund. You choose the fund with the year closest to when you expect to retire, and it handles the mix of stocks and bonds for you, becoming more conservative over time.
• A broad index fund. This holds a large slice of the market in one fund, such as a total stock market fund, usually at a low cost.

If you want one decision and nothing to manage, I'd choose a target-date fund. Look at the expense ratio, which is the yearly fee shown as a percentage, and favor lower ones.

Our guide to starting to invest as a beginner explains these fund types in more detail.

Set up automatic contributions

Most brokerages let you schedule a transfer from your bank account every month or every payday. Some also let you invest that money into your chosen fund automatically.

Pick an amount that fits your budget, even if it's small. You can raise it when your income goes up.

What to know about taking money out

A Roth IRA is meant for retirement, but it's more flexible than people expect.

• You can take out the money you contributed at any time, for any reason, without taxes or penalties.
• Earnings, meaning the growth on your money, are different. To take them out tax-free and penalty-free, you generally need to be at least 59½ and have had a Roth IRA for at least five years.
• There are some exceptions for earnings, including up to $10,000 toward a first home once the account is at least five years old.

Schwab has a clear summary of the Roth IRA withdrawal rules if you want the details.

Even though you can withdraw contributions, it's best not to treat your Roth IRA as an emergency fund. If you take contributions out, you generally can't put them back beyond that year's normal limit, so that money loses its chance to grow tax-free. Keep a separate cushion in savings for surprises. Our guide to building your first emergency fund covers how.

A simple plan to get started

1. If your job offers a 401(k) match, make sure you're getting the full match.
2. Open a Roth IRA at a large brokerage with no account fee.
3. Transfer in a first deposit you're comfortable with.
4. Buy a target-date fund or a broad index fund with that money.
5. Set up a monthly automatic contribution.

If you only do one thing after opening the account, check that your money is actually invested in a fund and not sitting in cash.

This article is general education, not personalized tax or investment advice. Investing involves risk, and the value of your account can go down as well as up.