Opening a Roth IRA with Vanguard

You know when there’s that task that seems like a lot of work, so you keep putting it off and the longer you put it off the more overwhelming it gets? …. That was me with opening up our Roth IRAs.

I knew I wanted to invest and open up a Roth IRA since I started my debt free journey. It was one of the reasons I was so eager to become debt-free.

Well… we became debt free in October 2017 and I JUST opened up our Roth IRAs this past March. I kept putting it off because I thought I would need to do tons of research and that it would be a long process.

That was definitely not the case. It took me about 30 minutes to open up an account with Vanguard. I heard good things about that company, read some quick reviews and realized I just needed to make a decision, so I did.

After opening up our Roth IRAs, I came across the book The Simple Path To Wealth by JL Collins. I read it in two days and really enjoyed how it easy it was to understand (despite it being all about investing). I was glad to find out he recommends Vanguard funds as well.

If you want to invest and don’t know where to start, I recommend you read this book. It helped me come up with a clear plan for where I want to put my money.

Steps For Opening a Roth IRA With Vanguard

  1. Head to investor.vanguard.com
  2. Click on “Open an Account Online”
  3. Click on “Open a New Account”
  4. Next you’ll be asked how you would like to fund your account:
    Electronic Bank Transfer (I went with this option).
    Rollover from an employer plan
    Transfer investments from another financial firm
  5. Create a Vanguard account login, if you don’t already have one.
  6. You will be asked to choose an account type (i.e. IRA, 401k, 529)
  7. Complete an online application (5-10 minutes)
  8. Once application is complete, the bank transfer will be initiated.
  9. Lastly, you will receive account updates and confirmation via email after deposits have been received.
    This can take about 1-2 days.
  10. And you’ve done it!

Once you’ve opened the account you can either schedule automatic payments or manually send it over. I currently fund my account manually, sending $100 every week towards our IRAs.

A Few Roth IRA Facts

  1. The 2020 maximum contribution is $6,000/year (if under 50), $7,000/year (50 and older).
  2. Contributions are limited by how much you earn.
  3. You don’t get an immediate tax break.
  4. It all comes out tax free ((including earnings) at retirement.
  5. There are some exceptions to withdrawing penalty free before 59-1/2 (i.e first time home purchase)

Again, if you want more information regarding investing I recommend reading The Simple Path to Wealth!

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