One of the very best investment vehicles to prepare for retirement is a Roth IRA. It gives you an opportunity to provide tax-free income once you retire. But a Roth IRA itself is not an investment. That’s why it’s important to know the best investments for a Roth IRA in 2023.
The table below summarizes six of the top investments to hold in a Roth IRA. You can skim for the basics, then read the more detailed descriptions that follow.
Investment |
Best For |
Minimum Investment | Risk Level |
Fees |
| Stocks | Long-term growth | None | Moderate to high | $0 |
| Bonds/Fixed Income | Safety of principal/risk reduction | $100 to $1000 | None to moderate | Nominal, based on broker |
| Exchange Traded Funds (ETFs) | Passive diversification of stocks and bonds | The share price of one ETF | Moderate to high | $0 |
| Mutual Funds | Active diversification of stocks and bonds | At least $1,000 | Moderate to high | 0% to 3% |
| Cryptocurrency | Alternate investment/long-term growth | Varies by platform | High | Varies by exchange or broker |
| Real Estate Crowdfunding | Investing in real estate deals or funds | As low as $10 | Moderate to High | 1% to 3% |
The best time to open a Roth account is today.
There's no time like the present to begin preparing for your retirement. Click on your state now to find out more.
Our Picks for 6 Best Investments for Roth IRA
Normally when we provide “best for” guides for any financial service, we also offer a ranking of which we believe to be the best of the group. But in this case, we’re covering broad investment categories. Each is either necessary in building a successful Roth IRA, or at least highly desirable.
For that reason, we’re not going to provide a rank for our picks of the best investments for a Roth IRA. But we will provide what each investment class is best for within your portfolio.
- Stocks: Long-Term Growth
- Bonds/Fixed Income: Safety of Principal/Risk Reduction
- ETFs: Passive Diversification of Stocks and Bonds
- Mutual Funds: Active Diversification of Stocks and Bonds
- Cryptocurrency: Alternate Investment/Long-Term Growth
- Real Estate Crowdfunding: Investing in Real Estate Deals or Funds
Stocks: Best for Long-Term Growth
- Minimum Investment: None
- Risk Level: Moderate to high
- Fees: 0
For long-term growth, stocks are the most basic asset to hold in a Roth IRA. That’s because a Roth IRA is a retirement plan usually held for decades. Bank assets, yielding less than 1%, will not produce a big retirement nest egg. But stocks, which average about 10% per year, can turn regular contributions into a seven-figure portfolio.
You’ll need to learn how to begin stock investing, which will require knowledge of stocks, trading, platforms, and other terms. It’s also important to choose a brokerage account if you want to invest in individual stocks.
A brokerage account is an investment account for your free-to-trade individual securities, like stocks. The best online stockbrokers not only enable you to trade stocks online but also offer commission-free trades. Examples include E*TRADE and TD Ameritrade.
If you’re an advanced investor, you could also look into the best investment apps. They offer streamlined, high-speed trading, but with little support or knowledge required.
At the opposite end of the spectrum, take a look at the best robo-advisors if you want to invest in stocks, but aren’t comfortable choosing or managing your own investments.
Our Picks for 6 Best Investments for Roth IRA
