Roth IRA
Start saving for retirement with a Roth IRA.
By investing in a Roth IRA, you won't pay taxes on potential earnings and can enjoy the freedom of withdrawing your money in retirement without worrying about paying taxes on it.
For other IRA options, check out SoFi's Traditional IRA and SEP IRA accounts.
What is a Roth IRA?
A Roth IRA is an individual retirement account that offers potential tax advantages. Unlike traditional IRAs, you make contributions to a Roth IRA with after-tax dollars, meaning they are not tax deductible. However, qualified withdrawals in retirement are tax free, including both contributions and investment earnings. So, it's a way to save for the future while enjoying tax-free benefits.
Learn more: Roth vs Traditional IRA Comparison
How a Roth IRA can help you save for retirement.
Tax-free benefits.
Both your contributions and whatever you earn on them are tax free when you withdraw from your Roth IRA in retirement.
Convenient access to your money.
You can withdraw contributions at any time, tax- and penalty-free. Note that earnings are subject to different rules.
No required withdrawals.
Unlike traditional IRAs, Roth IRAs do not require that you withdraw a certain amount of money each year after reaching age 72.
Beneficiaries aren’t taxed.
Rest easy knowing your beneficiaries can make tax-free withdrawals if they inherit your Roth IRA.
Choose the investment approach for your Roth IRA.
Automated Roth IRA:
A hands-off approach.
Unsure about your investment options or where to start? We're here to help. Just share your retirement and investment goals with us, and our robo-advisor will create and maintain a personalized portfolio specifically tailored to your Roth IRA.
Self-Directed Roth IRA:
Do it yourself.
If you prefer to take control and choose your own investments for your Roth IRA, consider our self-directed investing option. Manage your investments directly and enjoy zero commission on your trades.
Why choose a SoFi Roth IRA?
There are lots of reasons to love Roth IRAs — and even more when you open one with SoFi.
Self-directed or automated investing.
Take control with self-directed investments or opt for an automated investing Roth IRA and we'll suggest a portfolio based on your goals and risk tolerance.
Get personalized advice and guidance.
Book a complimentary 30-min session with one of our financial planners. They can answer your questions and help you build an investment plan that aligns with your retirement goals.
Diversify your portfolio.
Choose from a wide range of investment options with no commissions. Other fees apply.
Low fees and no minimums.
We don’t charge account open or maintenance fees**. And you can invest at your own pace without worrying about account minimums.
How to open a Roth IRA with SoFi:
Choose an IRA account type.
Select Roth IRA. Other options include traditional and SEP.
Select how you'd like to invest.
You choose how hands on you want to be with your investments—do it yourself (Active Roth IRA) or have us do it for you (Automated Roth IRA).
Open an account.
After you’ve opened your account, add money to your IRA by making a single or recurring deposit from your bank account using SoFi's secure interface.
Income too high? Consider using the "back door."
If your income exceeds the limit for Roth IRA contributions, you can utilize the ‘back door’ strategy. This involves initially placing funds in a traditional IRA (which has no income cap) and then moving those funds to a Roth IRA using a Roth conversion. When you go this route, you have to pay taxes on deducted contributions and any earnings, but you can enjoy tax-free withdrawals later.
Contact us for the paperwork, and once you’ve submitted it we’ll take care of the Roth IRA conversion. Remember, this is a taxable event, so you may want to consult a financial advisor and/or a tax professional before moving forward with a backdoor Roth as it cannot be reversed.
FAQs
• Unlike traditional IRAs, contributions to a Roth IRA are made with after-tax dollars. This means you won't receive a tax deduction for your contributions. The benefit, however, is that withdrawals during retirement are tax-free, provided certain conditions are met.
• Roth IRAs have income restrictions which may limit or prohibit contributions if your income is too high. For instance, individuals with a modified adjusted gross income (MAGI) over $161,000, or joint filers with a MAGI over $240,000, are not eligible to contribute.
• While you can withdraw your contributions to a Roth IRA at any time without penalty, withdrawing earnings before age 59 ½ and before the account has been open for five years may result in penalties and taxes. This is important to consider if you think you may need access to these funds before retirement.
Save for retirement the smart way.
There’s lots to love about a Roth IRA. Put your money to work today for tax-free withdrawals in the future.
SoFi > Online Investing > IRA Accounts > Roth IRA
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