money stuff you need to know: how to open a roth ira

If you're the person who is trying to get their finances in order and you keep hearing about Roth IRAs, here is how and where to actually open one. I'm going to go through this step-by-step in a pretty detailed, hopefully easy to understand way. And if you're new here, hi, I'm Mallory, a certified financial planner helping you understand your money better, so follow along. I have all my accounts at Fidelity and it started because I worked there and I had to have my accounts there. But now that I don't work there anymore, I'm still going to have my accounts there for a couple different reasons. I think that their app and their website is super easy to use and the amount of tools and free resources that they provide to investors is absolutely insane. They also are not publicly traded, so they have no outside shareholders that they're having to appease and it's super low cost. So you don't really pay for any of the trading you do and you also don't pay to have an account there. Let's get started on how to open your account step-by-step. So you're going to go to fidelity.com and an account button, it's pretty big and in right in the middle of the screen. You click on that and then the next step is going to be clicking on where it says retirement and IRAs, there's a little box and it's going to say open an account. You're opening a Roth IRA, which is a retirement account, so you'll click that open an account in that box. It'll show you three different types of retirement accounts IRAs, you are going to click the Roth IRA. Once you've clicked that, it is going to ask you a question, are you already a Fidelity customer? You don't have any accounts there, you clicked no and then you click next and then you do have to fill out all of your information. This should be information that you already know. You do need your social security number, so be sure to have that handy. By the way, this is going to ask for your employment information. You do have to fill that out. That's a requirement that every brokerage firm has, it's not specific to Fidelity. You are also going to get to a section where it asks you two yes or no questions. Most of the time the answers to both these questions are no. One of the questions is asking, are you an associate of a FINRA member firm? You would know if the answer was yes because your employer would tell you. And the other question is asking basically if you're 10% owner of a publicly traded company, so 10% or more ownership of the publicly traded company. I've never seen anyone click yes on this, but you would know if you needed to click yes. Then you are going to confirm and review all the information, agree to the terms. These are just general terms, this is pretty much just standard procedure for every single brokerage firm. Then you are going to click open account. If you made it through that, you should have an account number at this point if you fully submitted everything and that should be pretty obvious on your screen. The next step is linking a bank. Okay, to actually link a bank you need one of two things. Number one, you either need your bank username and password, so what you use to actually log into the bank, or if you want to manually enter things, you need your bank routing and account number. Either is totally fine. Follow the steps, it should link the bank at the end. Sometimes it takes a couple days to actually verify, but most of the time it goes through right away. Once the bank is linked, you are going to have the option to actually transfer funds from the bank account to your new Roth IRA. You can do this either just once, so that means you're just doing a one-time transfer from your bank, or you can set up recurring investments or transfers, which means that you can move money from the bank directly into an investment or directly just into the cash position in your Roth. By the way, if you're trying to link a bank that's not actually in your name, so if it's in your spouse's name or in your mom's name, you're probably going to have an issue. The last step, your account actually needs to grow, so you do need to make sure it's invested in something. If you do not select anything, it is just going to sit in a money market, which is basically like a high-yield savings account. I am going to cover some investment ideas for your Roth IRA in the next video.