Keep reading for investment advice on the best Roth IRA investments to consider for making your account grow. We’ll also go over what not to put in a Roth IRA, their contribution limits, and more.
An individual retirement account (IRA) is a tax-advantaged savings and investment account that helps you save for retirement. The four most popular types of IRAs are traditional, Roth, SIMPLE, and SEP.
What is the Difference Between a Traditional and Roth IRA?
Traditional IRAs and Roth IRAs have different tax advantages. With a traditional IRA, you deduct your contributions during the tax year when you file or add the money to the pre-tax account.
Best Investments to Consider in a Roth IRA Account
1. Individual Stocks
Investing in stocks is an investment you make by purchasing tiny fractions of ownership in a public company. These small fractional ownership pieces are called shares of a company’s stock.
Best Investments to Consider in a Roth IRA Account
2. Bonds
While you want your Roth IRA to consist mainly of more aggressive investments, bonds make a solid addition to investment portfolios as you approach retirement age.
Best Investments to Consider in a Roth IRA Account
3. Exchange-Traded Funds
For beginning investors, using these funds to build entire investment portfolios can make a lot of sense. They provide instant diversification with low costs on an all-in-one investment. Over time, these are safe investments that build considerable wealth.