How to open a Roth IRA
Last updated August 2026
Short answer
The administrative part is genuinely easy. The two things worth attention are whether you are eligible and whether the money actually gets invested.
Check eligibility first
You need taxable compensation for the year: wages, salary, tips, bonuses or self-employment income. Investment income does not count.
For 2026, the contribution phases out between $153,000 and $168,000 for single filers, and $242,000 and $252,000 for married filing jointly.
Above those ranges the direct contribution is closed, and the backdoor route through a traditional IRA is the alternative.
Choosing a broker
Compare on fund costs and whether the funds you want are available without a transaction fee, since account fees at major brokers are now generally zero.
Check that the firm appears in FINRA BrokerCheck and is a SIPC member, which takes a minute and rules out the worst outcomes.
Fractional share trading matters if you plan to invest small amounts regularly, because it lets a contribution be fully invested rather than partly left in cash.
The application
You will need a Social Security number, date of birth, address, employment details and beneficiary information.
Name a beneficiary during the application. An IRA passes by beneficiary designation rather than by will, and leaving it blank creates avoidable problems later.
Most applications are approved immediately, with occasional manual identity verification adding a day.
Try it in Walnut
Walnut connects to your brokerage once the account exists and reads what is inside it, alongside anything else you hold.
Funding it
Link a bank account and transfer the amount you want to contribute, choosing the tax year deliberately rather than accepting the default.
Contributions made between January and the April deadline can count for either year, and providers usually default to the current one.
Setting up an automatic monthly transfer works better than an annual decision, since the money moves before it can be spent.
Actually investing it
The contribution arrives as cash in a settlement fund and earns very little until you place a trade.
Choose the investment in the same session as the transfer, or set up automatic investing, so the two steps never come apart.
A broad index fund or a target-date fund is a reasonable default, and the decision matters less than not leaving the balance in cash for a decade.
Common mistakes in the first year
Leaving the contribution in cash, which is the most common and the most expensive over time.
Labelling a January contribution for the wrong tax year, which quietly wastes an allowance that cannot be recovered.
Contributing while ineligible, which requires removing the excess and its earnings before the filing deadline to avoid a 6% excise tax for each year it remains.
Sources
Eligibility, compensation definitions and the 2026 phase-out ranges are in IRS Publication 590-A and Notice 2025-67. Broker registration can be checked at FINRA BrokerCheck. Walnut is informational and is not an investment adviser. This guide is educational and not personalized investment advice.
FAQ
How do I open a Roth IRA?
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Choose a broker, complete an application with your personal and employment details, link a bank account, transfer money, and then choose investments. The account itself takes about fifteen minutes; the last step is the one people forget.
What do I need to open one?
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Social Security number, date of birth, address, employment information and a bank account to fund it. Most applications are approved instantly, and identity verification occasionally adds a day.
Am I eligible?
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You need taxable compensation for the year and income below the phase-out, which for 2026 runs $153,000 to $168,000 for single filers and $242,000 to $252,000 for married filing jointly. Above those, the backdoor route exists instead.
How much do I need to start?
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Most major brokers have no minimum to open an account, and fractional share trading means a first contribution can be small. The limit for 2026 is $7,500, or $8,600 from age 50.
What is the deadline?
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The tax filing deadline for that year, generally 15 April of the following year. Extensions do not extend it, and contributions made between January and April must be designated for the correct year.
Why is my money still in cash?
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Because transferring money into an IRA and investing it are two separate actions. Contributions land in a settlement fund and stay there until you buy something, which is the single most common mistake with a new account.
What should I invest in?
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A broad, low-cost index fund or a target-date fund covers most cases and requires no ongoing decisions. What matters more than the specific choice is that the money is invested at all rather than sitting in cash for years.
Should I open one if I already have a 401(k)?
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The limits are entirely separate, so a Roth IRA adds $7,500 of tax-advantaged room on top. It also gives investment choice a plan menu cannot, and its five-year clock starts running the moment you fund it.
What if I contribute and then discover I earned too much?
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Remove the excess contribution and the earnings attributable to it before the tax filing deadline, and no penalty applies. Left in place, a 6% excise tax applies for each year the excess remains, so this is worth catching in the same year.