Best Roth IRA Platforms?
It has been a while since this topic has been posted and the old forums mostly contain outdated information given the recent trend of fee pressure within the industry.
I am looking to open up a Roth IRA account and I want to find the best one for my use. I will mostly use it for just long-term buys and holds (S&P Index, Total International Bond/Equity Index). I am looking for lowest cost, user friendly, and strong research (for actively investing in PA) platforms.
I’ve done some research online and it’s all pretty generic information and reviews. I wanted to get some insight from well-informed finance professionals with experience using these platforms, so I came here.
bump
If it's for personal use, most of the online brokerage firms ( e.g. Fidelity) allow you to open up a Roth account.
Not exactly sure what you mean by “personal use”. I am using it to save for retirement.
If you are referring to the research comment, I meant that I could potentially use the research from the platform to help with investment decisions in a different brokerage account for fun.
The Roth IRA will just track the indexes I mentioned with appropriate allocation.
If you plan on running a basic mutual fund strategy and don't care much about portfolio analytics, I recommend Fidelity since they have a line of ZERO expense ratio mutual funds that will give you exposure to US and International equities for free (although fees at other brokers are super cheap and may also hit zero).
I recently moved my Roth from Fidelity to Interactive Brokers, however, since they have a more advanced trading/research platform and far, far superior portfolio analytics (called "Portfolio Analyst by IB"). I'm pretty interested in the nitty-gritty details of what is driving my investment performance and liked the software.
Interactive Brokers was one of the platforms that was consistently mentioned in my brief research. Correct me if I am wrong, but I believed it had much higher fees than the other platforms. Do you believe the advanced analytics justify this?
Check your firm's trading policy. You may be limited to your choice of platform by firm policy.
Regarding depositing to the Roth IRA. Are there any requirements or can I accumulate my paycheck in my checking acc. and write a check after?
You can make contributions to your Roth at any point in the tax year. It can be all one lump sum the day before the tax year ends or you can make small contributions on the way.
There ARE income limits as well as the $6,000 contribution limit. Meaning if you make above a certain amount in the tax year (i think its somewhere around $120,000 for single filers but i havent checked in awhile) then the total amount you are allowed to contribute to a Roth starts to phase out.
To get around this, I have heard that you can do a "backdoor" Roth where you contribute to a standard IRA, then roll it over to a "roth" version. Not sure how complicated that is or what the tax implications on that might be for your specific situation, so do some research. I just know this option exists.
I used Fidelity and Vanguard for awhile and have switched to Fidelity as my primary broker for all new capital (since Vanguard was buy and hold, i didn't roll it over or anything I'm fine with letting it sit there).
I like Fidelity because I believe it has the most commission-free ETFs/Mutual fund options of any of the major brokers, has commision-free single stock trades when I want to do that, and has a much friendlier User Interface on mobile and computer than Vanguard. Fun fact; Vanguard intentionally does not make the UI easy or enjoyable to subconsciously discourage people from being too active. Part of the whole Boglehead identity.
Fidelity, like most of the other major brokers who are not Vanguard, are ultimately shareholder profit driven so they are likely to encourage up-selling services beyond the basics, but as a FINRA regulated person who is limited to your basic buy-sell choices who is looking at long-term investing, these factors don't matter to me. Have been happy with Fidelity for the last year.
Interesting perspective. Super helpful. +1 SB'd.
Interestingly, a year or two ago virtually all major platforms dropped commissions for ETFs. The idea behind this was that you could make enough by selling order flow to turn a profit, and "free trades" make a pretty compelling selling point.
Before anyone thinks that 'selling order flow' sc**ws over the user, it doesn't. Investors get better execution, and the market makers are willing to provide that in exchange for knowing that the trade is coming from John Smith, not some hedge fund that knows more than they do. The risk reduction is enough that the market maker is willing to pay both the investor and the platform for it.
This makes a lot of sense, I assumed this to be the case with how old fashioned their website is.
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