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Open a Roth IRA
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Roth IRA
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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.
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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
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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 73.
Beneficiaries aren’t taxed.
Rest easy knowing your beneficiaries can make tax-free withdrawals if they inherit your Roth IRA.
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Choose the investment approach for your Roth IRA.
Automated Roth IRA: < br/>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.
Open an Automated Roth IRA
Self-Directed Roth IRA: < br/>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.
Open a Self-Directed Roth IRA
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Why choose a SoFi Roth IRA?
There are lots of reasons to love Roth IRAs — and even more when you open one with SoFi.
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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.
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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.
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Diversify your portfolio.
Choose from a wide range of investment options with no commissions. Other fees apply.
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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.
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How to open a Roth IRA with SoFi:
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Choose an IRA account type.
Select Roth IRA. Other options include traditional and SEP.
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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).
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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.
Open a Roth IRA
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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.
Get more Roth IRA resources and education.
See more investing articles
FAQs
Whether you’re eligible to open and contribute to a Roth IRA depends on your income. If your income exceeds the limits set by the IRS, you cannot contribute to a Roth IRA.< br/>< br/>In 2025, single filers earning less than $150,000 and married couples filing jointly with incomes under $236,000 are eligible to make full contributions to a Roth IRA. If your Modified Adjusted Gross Income (MAGI) falls between $150,000 and $165,000 as a single filer, or between $236,000 and $246,000 for joint filers, your contribution amount will be reduced.
In 2026, single filers earning less than $153,000 and married couples filing jointly with incomes under $242,000 are eligible to make full contributions to a Roth IRA. If your MAGI falls between $153,000 and $168,000 as a single filer, or between $242,000 and $252,000 for joint filers, your contribution amount will be reduced.
In 2025, the contribution limits for Roth IRAs are $7,000 per year if you’re under 50, or $8,000 per year if you’re 50 or older. In 2026, the contribution limits for Roth IRAs are $7,500 per year if you’re under 50, or $8,600 per year if you’re 50 or older. Remember that income caps may also apply (see above).
SoFi Roth IRAs do not charge anything to open the account, but you need $5 to choose investments in your Active Invest Roth IRA ($50 to invest in an Automated Invest Roth IRA).
The key distinction between a Roth IRA and a traditional IRA lies in the tax treatment. With a Roth IRA, you make contributions with after-tax money, allowing for tax-free withdrawals of your contributions and earnings in retirement. Your contributions to a traditional IRA are made with pre-tax money. So, a traditional IRA offers tax deductions on contributions, but withdrawals are taxed as income. Essentially, Roth IRAs offer tax-free withdrawals and traditional IRAs offer tax-deferred withdrawals.
Yes, you can have both a Roth and Traditional IRA. However, it’s important to understand that the contribution limits apply across all your IRAs combined. For the tax year 2025, the total contribution limit is $7,000 for all your IRAs ($8,000 if you are 50 or older); for 2026, the total contribution limit is $7,500 for all your IRAs ($8,600 if you are 50 or older). Keep this in mind when planning contributions and considering the tax implications for each account.
Roth IRAs offer unique benefits for retirement savings, such as tax-free withdrawals in retirement. Here are some considerations to help you decide if opening a Roth IRA is right for you:
- 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) of $165,000 or more, and joint filers with a MAGI of $246,000 or more, are not eligible to contribute in 2025. In 2026, single filers with a MAGI of $168,000 or more, and joint filers with a MAGI of $252,000 or more 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.
SoFi Roth IRAs have no maintenance fees and low minimums, so you can save for retirement without unnecessary costs weighing you down. Please view our fee disclosure for a complete listing of fees.
Yes! To transfer funds from a Roth IRA at another brokerage, you’ll just need to submit an Automated Customer Account Transfer (ACAT) request form via the SoFi app or website. To roll over funds from a Roth 401(k), you’ll need to initiate the transfer with the institution currently managing your Roth 401(k). Note that you cannot roll over funds from a traditional IRA or 401(k) into a SoFi Roth IRA.
Start by logging into your account. Then, under “Invest” select your Roth IRA. From there, you can manage your account and see its performance.
You can withdraw contributions from your Roth IRA at any time without paying penalties or taxes. However, if you withdraw any earnings before they’ve been in your Roth IRA for five years, you could owe taxes and a 10% penalty on the amount you withdraw.
Deciding if a Roth IRA is better than a 401I(k) depends on your personal circumstances and goals. Because you make contributions with after-tax money, a Roth IRA could be a good option for those in lower tax brackets now. If your employer offers a 401(k) with contribution matching, you could increase your contributions, essentially for free. Keep in mind, some employers offer Roth 401(k)s, which allow you to reap the benefits of both types of retirement accounts.
One of the main tax benefits of a Roth IRA is that qualified withdrawals in retirement are tax free, including both contributions and investment earnings. Additionally, the earnings from your Roth IRA are not subject to income tax. That means the amount you put in today is yours in retirement — plus whatever those investments earn.
A Roth IRA conversion occurs when you move retirement funds from a traditional IRA or 401(k) account into a Roth account. Only post-tax contributions can go into a Roth IRA, so you’ll need to deduct taxes from traditional IRA funds before converting to a Roth account. You can convert by withdrawing from your traditional IRA and contributing to a Roth IRA yourself, or your financial institution can do it for you.
A backdoor Roth IRA is a way for high earners who aren’t eligible to contribute to a Roth IRA to still enjoy the benefits of a Roth account. Instead of contributing directly, individuals can contribute to a traditional IRA and then convert it to a Roth IRA. This process includes withdrawing traditional IRA funds, paying the taxes on earnings, and then moving the rest of the money into a Roth IRA.
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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.
Open a Roth IRA
SoFi > Online Investing > IRA Accounts > Roth IRA
Jun
28
2024
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