Once you have made the decision to start putting some of your earnings aside in a Roth IRA account to grow for your retirement, the next decision you must make is where to invest your money. As noted in the traditional IRA section, you must find an IRS-approved institution to hold this custodial account for you. There is no upward limit to how much you can ultimately accumulate in your Roth account, and, in theory, there is no minimum amount to open an account. In fact, you do not need to limit yourself to only one account. You are limited, however, to the maximum number of dollars you can contribute among all of your IRA accounts in any one year whether traditional or Roth.

Things to Keep in Mind

It is likely that you will face minimum thresholds at various institutions to open an account, and perhaps for annual contributions as well. As a general rule, you will probably be able to start with smaller accounts in a bank than in a brokerage firm. Keep in mind that you do not need to contribute the maximum in any given year, and there is no penalty if you cannot contribute at all in certain years.

Providers to consider for your account include:

• Banks, including commercial, savings and loan, or trust companies

• Credit unions

• Mutual fund companies

• Brokerage firms

• Insurance companies

You will have to fill out some paperwork to open the account, which can be done in person or, in some cases, online. It's a good idea to shop around for a place that matches your investment goals. If you are getting started in your twenties or thirties, you can afford to invest in higher risk vehicles to start. Later on you will want to look for growth with a bit more predictability.

Being Aware of Fees

When you are researching where to place your IRA or Roth, you will want to know what fees will be assessed. There may be a fee to set up the account, and most likely there will be annual fees to maintain it. The fees may be structured differently depending on the total size of your account — or accounts — held in any one institution. You may have the choice of having these fees deducted from the account itself, which reduces its growth, or paying them separately. Depending on the deduction allowances applicable for your personal income taxes, there may be an advantage to paying the fees separately. If there is a lot of action with buying and selling securities in your account, it may be more economical to negotiate a so-called “wrap” fee. This is a flat percentage of the value of the account paid to your brokerage house annually instead of individual commissions and fees for each transaction. If you do not expect to have much movement in the account, this might not be sensible.