How to Open a Roth IRA with Vanguard in 8 Easy Steps

April 26, 2022

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Albert Einstein once called compound interest the eighth wonder of the world. And for good reason!

Compounding is what turns investors into millionaires. The earlier you start investing, the more your money can compound, or grow. This is why so many people find themselves wondering how to open a Roth IRA with Vanguard. 

Vanguard has a reputation as one of the most reliable investing platforms. Roth IRAs are known as one of the best investment vehicles for people looking to build wealth. So it makes sense to combine both into a Roth IRA with Vanguard! 

Whether you’re a seasoned investor or just getting started, Vanguard makes it simple. Here’s everything you need to know about how to open a Roth IRA with Vanguard and answers to other questions you might have. 

What is a Roth IRA?

First things first. Before you move ahead with a Roth IRA at Vanguard, make sure you’re clear on what one is. The short and sweet version is that a Roth IRA is a type of investing vehicle controlled by you, not your workplace or your employer. That means that you set it up and you choose the funds to invest in. 

That’s one reason Roth IRAs are so desirable.

Another aspect of Roth IRAs that makes them so popular is the tax treatment Roth IRAs get–or don’t get! Since you invest post-tax money–otherwise known as money that you've already paid taxes on–your Roth IRA grows tax-free and gets withdrawn tax-free. 

“Future you” is going to be thrilled with your decisions today!

Find out more about how Roth IRAs work and if you’re qualified to invest in one here.

8 Easy Steps to Opening a Vanguard Roth IRA 

After you’ve decided that a Roth IRA is right for you, it’s time to open your account! Vanguard promises that you can open an IRA in a few easy steps. Instead of taking their word for it, we put their steps to the test.

Here’s what we learned about how to open a Roth IRA with Vanguard:

Step 1

Vanguard home page

Go to the Vanguard site for personal investors and click Open An Account.

Step 2

Vanguard Account opening

From there, decide if you want to open a new account or move an account to Vanguard from another bank or broker.

Step 3

Vanguard account funding

Indicate how you fund your account. 

Accounts can be funded in three different ways:

  1. Through transfers from another bank or via wire
  2. As a rollover from an employer plan 
  3. From another investment firm

Step 4

Vanguard login page

Create a log-in by entering your personal information.

Step 5

Vanguard selecting retirement investment option
Vanguard Roth IRA selection

Select the type of account you’d like to open. In this case, you’ll want to select “Retirement Investing (brokerage IRAs)”

After clicking that, you'll be able to select “Roth IRA”.

Step 6

Complete your online application. You’ll share banking information to fund your account, as well as employment information. 

Step 7

Wait for Vanguard to process your application! They’re usually pretty quick, but in some instances, it can take up to five days to review an application. 

Step 8

Double-check that your account is active and funded. Then, select the funds you want to invest in. (We’re big fans of index funds–learn more about why here!)

How to Open a Roth IRA with Vanguard: Frequently Asked Questions

Vanguard works hard to streamline the process of opening an account. But it’s possible you still have questions. 

Let’s explore answers to some of the most common questions about how to open a Roth IRA with Vanguard:

How much money do you need to open a Roth IRA with Vanguard?

There’s no minimum balance requirement to open a Vanguard account. 

However, you do need a certain amount of money to begin investing in different funds within your Vanguard account. There are funds with a little as a $1,000 minimum. The majority of funds clock in slightly higher with $3,000 minimums. 

That being said, you can buy ETFs instead of mutual funds or index funds for much lower than that. These share prices vary but for $200-$300, you could be rocking your Roth IRA!

What are some of the Vanguard Roth IRA investment options?

Some of Vanguard’s most popular funds include:

  • VTI: Vanguard Total Index fund
  • BND: Vanguard Total Bond Market fund
  • VGTSX: Vanguard Total International Stock Index Fund Investor Shares
  • VTSAX: Vanguard Total Stock Market fund

Of course, you will want to do your own homework to determine which fund or funds are right for you. To help, Vanguard offers several different research and comparison tools on their site. 

If you are looking for a Vanguard Roth IRA calculator, you can explore their retirement calculator. Additionally, you can research different investment strategies, get portfolio suggestions, and even compare specific funds. That way, you can feel confident that your Vanguard Roth IRA is aligned with your retirement goals.  

Is Vanguard friendly for beginners?

Vanguard is good for beginners thanks to its variety of funds and focus on low fees. Low-cost index funds take the guesswork out of investing. That’s why these funds are a favorite in the FIRE community, people who are looking to maximize their wealth so they can become financially independent and possibly retire early. 

Vanguard keeps your investment costs low in other ways, too. If you enroll online and choose paperless statements, you don’t have to pay the annual $20 account fee.

Recently, Vanguard has become an even better option for beginner investors. Some new investors shied away from Vanguard in the past because they wanted more support. With Vanguard’s new Digital Advisor service, that support is easily and expertly available. 

What is Vanguard’s Digital Advisor?

Vanguard’s Digital Advisor is a robo-advisor. That means that investors get the benefit of expert investing advice at a lower cost than what is often charged to work with human advisors. 

Digital Advisor walks investors through their goals and their risk tolerance in order to build a custom investment portfolio tailored to their needs. The portfolio is built with Vanguard’s expert methodology so it takes the guesswork out of portfolio creation for new investors. Plus, Digital Advisor relies on ETFs, keeping your portfolio diversified and low cost. 

As an added incentive, investors can try out Digital Advisor for free for the first 90 days. After that, the advisory fees are in line with other robo-advisors. Vanguard charges a 0.20% advisory fee. That means that for every $1,000 you have invested with Digital Advisor, you will pay $2 in fees. 

It is also worth noting that there is a minimum account balance to access Vanguard’s Digital Advisor. Investors need to have at least $3,000 to invest. So while Vanguard has definitely come a long way in terms of being the right investment option for beginners, it may not be the right choice for everyone who is just starting out.

How old do you need to be to open a Roth IRA?

If you want to open a Roth IRA with Vanguard on your own, you need to be 18 years old. 

Vanguard accounts have other requirements as well. To open a Vanguard account, you must:

  • Be 18 years old
  • Be a US citizen
  • Have a US mailing address
  • Have a Social Security number

When you open a Vanguard account, you’ll also be asked to provide your bank account number and employer information. 

Can a minor open a Roth IRA with Vanguard?

What if you want to open a Vanguard account before 18? Many families are interested in setting up Roth IRAs with Vanguard as soon as possible. After all, there’s no denying that compound interest is a world wonder. Just ask Einstein! 

In that case, your child may be eligible for a custodial Roth IRA. But remember that there are other requirements to opening and contributing to a Roth IRA besides age. 

Contributions to a Roth IRA have to be based on earned income. That means that if a minor does not have documented earned income, they are not eligible to make Roth contributions. 

How do I get support from Vanguard?

Vanguard built its reputation as the first investing brokerage to offer low-cost index funds to everyday investors. But they don’t sacrifice service to cut costs. There are several ways to get support from Vanguard if you need help opening an account.

You can connect with a member of Vanguard’s Client Services team Monday through Friday from 8AM to 8PM, EST. Client Services can be reached at 877-662-7447.

Additionally, Vanguard has a strong social media presence. That means that Vanguard is probably already active on your favorite social media platform. So investing advice and educational resources are only a few clicks away. 

Of course, Vanguard also has a fairly robust support center on its website. It offers FAQs, tutorials, and more.

Final Thoughts on How to Open a Roth IRA with Vanguard

Are you ready to set up a Roth IRA? The process is streamlined and straightforward with Vanguard. That means that you can be one step closer to hitting your retirement goals.

If you're not sure if Vanguard is right for you, check out some of our favorite investing apps and tools.

Whether you choose to open a Roth IRA with Vanguard or somewhere else, the most important thing is that you take action today. The sooner you open an account and select funds to invest in, the sooner the eighth wonder of the world can get to work for your wallet!

Do you have a Roth IRA? What investment options do you use or are you considering for retirement goals?

Please let us know in the comments below.

Andy Hill

Andy Hill, AFC® is the award-winning family finance coach behind Marriage Kids and Money - a platform dedicated to helping families build wealth and happiness. With millions of podcast downloads and video views, Andy’s message of family financial empowerment has resonated with listeners, readers and viewers across the world. When he's not "talking money", Andy enjoys being a Soccer Dad, singing karaoke with his wife and relaxing on his hammock.


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