Ally Invest Roth IRA

Ally Invest's Roth IRA account has no annual fee and no commission trades. Is it right for your retirement funds? Read on to learn how Ally Invest Roth IRA accounts work.

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• Account Fees & Minimums
  
• Trading Fees
  
• Robo Portfolio
  
• How Roth IRAs Work
  
• How to Open an Ally Invest Roth IRA Account
  
• How to Make Contributions
  
• Roth IRA Contribution Limits
  
• Other Types of IRA Accounts

(Read Reviews of Ally Invest)

Ally Invest Roth IRA Account Fees & Minimums

The following fees apply to Ally Invest IRA accounts:^[1]

• IRA annual fee: $0
  
• Minimum investment: $0
  
• Inactivity fee: $0
  
• IRA transfer fee: $50 (partial or full account transfers)
  
• IRA closure fee: $25 (charged when all funds are removed from the IRA)

If you're doing a full transfer out of Ally Invest, you'll incur both a $50 transfer fee and $25 closure fee.

Ally Invest IRA Trade Commissions

Ally's fees are among the lowest in the industry. These are the commission costs and types of trades you're able to make in an IRA:

Ally Invest also offers over 500 commission-free ETFs from Vanguard, GlobalX, WisdomTree, iShares, and more.

Ally Invest IRA Robo Portfolios

If you don't want to manage your own Roth IRA, Ally Invest also offers a robo-advisor service called Robo Portfolios.

Ally will automatically build a portfolio for you based on your goals and risk tolerance. Your portfolio will be professionally managed so you don't have to worry about maintaining it.

Robo Portfolios is free of advisory fees, which beats out many other robo-advisors. However, the catch is that 30% of your portfolio will be held in cash. Read more about it in our detailed review.

How Roth IRAs Work

A Roth IRA is an Individual Retirement Account. Investment earnings can only be withdrawn after you've reached a certain age.

With a Roth IRA, you are contributing money that has already been taxed in your paycheck. So you will not be taxed again when you take the funds out. All investment gains are tax-free too.

Here are some rules and facts about Roth IRAs:

• Contributions are made with after-tax income.
  
• Your withdrawals are tax-free after age 59½.^[2]
  
• The maximum contribution per year is $6,500 ($7,500 if you're 50 or over).^[3]
  
• You can't contribute if you earn over certain income limits (more below).
  
• You can withdraw contributions anytime with no penalty.
  
• As long as you're earning income, you can contribute no matter your age.

How to Open an Ally Invest Roth IRA Account

Opening an Ally Invest Roth IRA is easy and can be done in just a few minutes.

1. Choose Approach
   First, decide if you want a self-directed or managed account.

2. Register
   You'll be asked if you're new to Ally or an existing customer. If you're new, register with your name and email.

3. Select Account Type
   Select which type of account you want to open. To open a Roth IRA, select IRA and then "Roth IRA".

4. Basic Information
   Provide basic personal information, including address, phone number, marital status, and Social Security number.

5. Fund Account
   Link a bank account. After you've funded your account, you'll be set up and ready to start trading. You can also open an Ally Invest IRA with $0 and fund it later.

How to Contribute to an IRA

You can fund your Ally Invest Roth IRA account in the following ways:

• Bank Wire
  This is the fastest way to fund your account. Bank wires can take just a few hours to one business day. Make sure you indicate the contribution year on your wire.

• Mail-in Check
  Snail mail may take a couple of days, but Ally Invest will process it as soon as they receive it and verify the check. Again, indicate the contribution year on your check.

• Online Transfer
  You can link your bank accounts and make online transfers whenever you wish or set up automatic recurring contributions. This is the most convenient, but not the fastest. It takes time to process the transfer and there's a clearing period of 3 business days.

• Journal of Cash
  If you already have an Ally Invest individual or joint account, you can perform a journal of cash from the existing account to the new IRA account.

Roth IRA Contribution Limits

For 2023, here are your Roth IRA annual contribution limits:^[3]

• $6,500 for those under age 50
  
• $7,500 for ages 50 and over

Roth IRAs have income limits. For 2023, single filers can make the full contribution if you make less than $138,000/year, and a limited contribution if you earn up to $153,000.

Joint married filers can make the full contribution if your combined income is less than $218,000/year, and a limited contribution for combined earnings up to $228,000.^[4]

Other Types of IRA Accounts

Ally Invest also supports these other IRA accounts:

• Traditional IRA
  Your contributions are made with pre-tax dollars and are tax deductible. You'll have to pay regular income tax when you withdraw upon retirement.

• Rollover IRA
  This allows you to rollover a 401(k) from your employer. It becomes a Traditional IRA when you roll it over.

• SEP IRA
  This IRA account is for self-employed individuals and small business owners. Your contributions are tax-deductible, but you'll be taxed at your current tax bracket when you withdraw at retirement. SEP IRAs have higher contribution limits than Traditional and Roth IRAs.

• SIMPLE IRA
  This is an employer-sponsored IRA plan for small businesses with an employer match incentive built in. Contributions are pre-tax and tax deferred until you withdraw at retirement.

• Coverdell Education Savings Account (ESA)
  This was originally called an Education IRA. It allows you to save for a child's education. Contributions are not tax deductible and are limited to $2,000/year, but withdrawals are tax-free.^[5]

Bottom Line

Ally Invest is not as well-known as other popular IRA providers, such as Fidelity and Vanguard. But it's worth considering. Ally Invest has some of the lowest trade fees in the industry. And with no annual fee and no minimums, its Roth IRAs are a great place for anyone to start saving in a retirement fund.

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