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Last week I professed my love for the Roth IRA and listed six reasons why the Roth is the not-so-little retirement savings vehicle that could. Another great thing is that so many institutions make it very easy for you to open a Roth IRA online.
A few months ago, I walked a friend through the process of opening a Roth IRA account online at Vanguard. Discount online brokerage houses such as Etrade, Scottrade, and TD Ameritrade also offer online Roth IRAs. Among brokerage houses, Vanguard have very low expense ratios, but they do require a hefty starting minimum of $1,000 (Vanguard's STAR mutual fund) or $3,000 (all other mutual funds). Fidelity and T. Rowe Price may be more accessible for beginning investor. At Fidelity, you can open an account with a minimum of $200 a month. In T. Rowe Price's case, you can start a Roth IRA for as low as $50 a month.
The decisions before opening a Roth IRA (i.e. Which provider do we go with? What is our asset allocation? Should we invest in individual stocks, mutual funds, or a combination of both? How much do we have to invest?) require some time and consideration. After you go through all that decision-making, however, the actual process of signing up and funding the account was smoothly and conveniently completely within 10 minutes.
5 minutes: Gather your personal information that a financial institution would need to open your account.
Basics: You should have your social security number, birth date, email address, and street address handy.
Funding: An electronic bank transfer is the quickest way to fund your account, for that, you would need your checking / savings account and routing numbers (found on your checks). If you want to fund your account by wire transfer, you would need your bank name and wire date. Both my Roth IRA and my friend's IRA were funded via electronic transfers, which I found it the easiest and most convenient way to fund IRA investments. An electronic transfer takes two business days to post at Vanguard, but we won't count those two days in the setting-up process.
Beneficiary information: You should also have the names and birth dates of your beneficiaries.
5 minutes: Fill in the requested information online and check your information to make sure they are correct. Presto! you now have a Roth IRA account.
The deadline to open and contribute to a 2009 Roth IRA is April 15th, 2010. With two more months until the contribution deadline, surely one can take a mere 10 minutes and open a Roth IRA? :) While saving for retirement is important for everyone, women are especially vulnerable to the risk of outliving their savings. By opening and consistently funding a Roth IRA, women can improve their financial security.
Other Helpful Links on the Roth:
Fabulous and Financially Savvy says Roth IRA is the new little black dress - perfect for every woman's "investment wardrobe".
PT Money details his Vanguard Roth IRA opening process.
http://wellheeledblog.com http://twitter.com/wellheeledblog Savvy Living Through Personal Finance
